EX-10.3 31 file009.htm AMENDED AND RESTATED CREDIT AGREEMENT


                                                               EXECUTION VERSION

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                          GMAC COMMERCIAL FINANCE LLC,
                            AS AGENT FOR THE LENDERS

                           TBS INTERNATIONAL LIMITED,
                                  AS GUARANTOR

                             HENLEY MARITIME CORP.,
                             VERNON MARITIME CORP.,
                              ARDEN MARITIME CORP.,
                                       AND
                            OLDCASTLE SHIPPING CORP.,
                                  AS BORROWERS

                                       and

                  THE LENDERS FROM TIME TO TIME A PARTY HERETO

                                   ----------

                        AMENDED AND RESTATED CREDIT AGREEMENT

    Dated as of June 1, 2004 and Amended and Restated as of February 1, 2005

                                   ----------

                           THACHER PROFFITT & WOOD LLP

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                                TABLE OF CONTENTS

PRELIMINARY STATEMENT .........................................................1

ARTICLE I DEFINITIONS .........................................................1
   Section 1.01   Definitions .................................................1
   Section 1.02   Interpretation ..............................................2
   Section 1.03   Accounting Terms ............................................2
   Section 1.04   Computation of Time Periods .................................2

ARTICLE II Initial LOANS AND Additional LOANS .................................2
   Section 2.01   Initial Loans ...............................................2
   Section 2.02   Additional Loans ............................................4
   Section 2.03   Interest on the Loans .......................................6
   Section 2.04   Maximum Interest Rate .......................................6
   Section 2.05   Repayment ...................................................7
   Section 2.06   Mandatory Permanent Reduction of Commitments ................7
   Section 2.07   Optional Prepayment of Loans ................................7
   Section 2.08   Application of Payments .....................................8
   Section 2.09   Manner of Payments ..........................................8
   Section 2.10   Register of Notes; Lost and Mutilated Notes .................9
   Section 2.11   Change in Circumstances ....................................10
   Section 2.12   Illegality .................................................11
   Section 2.13   Taxes ......................................................11
   Section 2.14   Break Funding Payments .....................................13
   Section 2.15   Alternate Rate of Interest .................................13

ARTICLE III RESERVED .........................................................13

ARTICLE IV REPRESENTATIONS, WARRANTIES AND AGREEMENTS ........................13
   Section 4.01   Company Status .............................................14
   Section 4.02   Company Power and Authority ................................14
   Section 4.03   No Violation ...............................................14
   Section 4.04   Governmental Approvals .....................................14
   Section 4.05   Financial Statement; Financial Condition; Undisclosed
                     Liabilities; etc ........................................15
   Section 4.06   Litigation .................................................15
   Section 4.07   No Default .................................................15
   Section 4.08   Use of Proceeds; Margin Regulations ........................15
   Section 4.09   Tax Returns and Payments ...................................16
   Section 4.10   Compliance with ERISA ......................................16
   Section 4.11   Ownership; Subsidiaries ....................................18
   Section 4.12   Compliance with Laws .......................................18
   Section 4.13   Investment Company Act; Public Utility Holding Company
                     Act .....................................................19
   Section 4.14   Environmental Matters ......................................19
   Section 4.15   Labor Relations ............................................20
   Section 4.16   Patents, Licenses, Franchises and Formulas .................20
   Section 4.17   Security Interests .........................................20
   Section 4.18   Indebtedness ...............................................21
   Section 4.19   Solvency ...................................................21


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   Section 4.20   Concerning the Vessels .....................................21
   Section 4.21   Citizenship ................................................22
   Section 4.22   Vessel Classification ......................................22
   Section 4.23   No Material Adverse Change .................................22
   Section 4.24   Insurance ..................................................22
   Section 4.25   Principal Place of Business and Chief Executive Office .....22
   Section 4.26   Legal Name .................................................22
   Section 4.27   Representations and Warranties True and Correct ............22
   Section 4.28   Foreign Assets Control Regulations, etc ....................22

ARTICLE V CONDITIONS OF LENDING ..............................................23
   Section 5.01   Conditions Precedent to Drawdown of any Loan ...............23
   Section 5.02   Further Conditions Precedent ...............................28

ARTICLE VI AFFIRMATIVE COVENANTS .............................................28
   Section 6.01   Existence ..................................................28
   Section 6.02   Payment of Debts ...........................................28
   Section 6.03   Accounts and Records .......................................29
   Section 6.04   Payment of Taxes and Claims ................................29
   Section 6.05   Financing Statements .......................................29
   Section 6.06   Compliance with Law ........................................29
   Section 6.07   Financial Statements and Reports ...........................30
   Section 6.08   Access to Books and Records ................................31
   Section 6.09   Notifications ..............................................31
   Section 6.10   Performance of Obligations .................................31
   Section 6.11   Environmental Matters ......................................31
   Section 6.12   Transaction Document Obligations ...........................32
   Section 6.13   ERISA ......................................................33
   Section 6.14   Fixed Charge Coverage Ratio ................................34
   Section 6.15   Obligations of Westbrook ...................................34
   Section 6.16   Total Funded Debt Ratio ....................................34
   Section 6.17   Minimum Fair Market Value of the Vessels ...................34
   Section 6.18   Ownership of Borrowers .....................................34
   Section 6.19   Delivery of Charters .......................................34
   Section 6.20   Vessel Operations and Management ...........................35
   Section 6.21   Appraisals .................................................36
   Section 6.22   Reimbursement for Expenses .................................36
   Section 6.23   Insurance ..................................................36
   Section 6.24   Reserved ...................................................37
   Section 6.25   Purchase Agreements ........................................37
   Section 6.26   Investment Company Act .....................................37
   Section 6.27   Payments on Collateral .....................................37
   Section 6.28   Maintenance of Vessels .....................................37
   Section 6.29   Registration and Documentation .............................37

ARTICLE VII NEGATIVE COVENANTS ...............................................38
   Section 7.01   Indebtedness ...............................................38
   Section 7.02   Liens ......................................................38


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   Section 7.03    Asset Sales ............................................   38
   Section 7.04    Assignment of Insurances ...............................   38
   Section 7.05    Sale of Notes or Accounts Receivable ...................   38
   Section 7.06    Sale and Leaseback .....................................   38
   Section 7.07    Restricted Payments ....................................   38
   Section 7.08    Investments ............................................   38
   Section 7.09    Restriction on Payment Restrictions Affecting
                      Borrowers ...........................................   39
   Section 7.10    Change in Business .....................................   39
   Section 7.11    OFAC ...................................................   39
   Section 7.12    Transactions with Affiliates ...........................   39
   Section 7.13    Changes in Offices or Names ............................   40
   Section 7.14    Changes in Fiscal Year .................................   40
   Section 7.15    Other Indebtedness .....................................   40
   Section 7.16    Consolidation, Merger and Sale of Assets ...............   40
   Section 7.17    Prohibited Transactions ................................   41
   Section 7.18    Amendment or other Modification of Certain Documents ...   41
   Section 7 19    Regarding the Vessels ..................................   41

ARTICLE VIII AGREEMENT TO GUARANTEE .......................................   41
   Section 8.01    Obligations Guaranteed .................................   41
   Section 8.02    Guarantee Obligations of Guarantor Unconditional .......   43
   Section 8.03    Waiver by Guarantor; Expenses ..........................   45
   Section 8.04    Other Security .........................................   46
   Section 8.05    No Set-off by the Guarantor ............................   46
   Section 8.06    Reserved ...............................................   46
   Section 8.07    Limitation on Liability ................................   46

 ARTICLE IX EVENTS OF DEFAULT; REMEDIES; APPLICATION OF PROCEEDS ..........   46
   Section 9.01    Events of Default ......................................   46
   Section 9.02    Waiver of Default ......................................   49
   Section 9.03    Remedies ...............................................   49
   Section 9.04    Rights of Set-Off ......................................   49
   Section 9.05    Rights and Remedies Cumulative .........................   50
   Section 9.06    Specific Remedies ......................................   50
   Section 9.07    Restoration of Rights and Remedies .....................   51

ARTICLE X RELATIONSHIP AMONG THE LENDERS ..................................   51
   Section 10.01   Appointment and Authorization ..........................   51
   Section 10.02   Delegation of Duties ...................................   52
   Section 10.03   Liability of Agent .....................................   52
   Section 10.04   Reliance by the Agent ..................................   52
   Section 10.05   Notice of Default ......................................   53
   Section 10.06   Credit Decision ........................................   53
   Section 10.07   Indemnification ........................................   54
   Section 10.08   Agent in Individual Capacity ...........................   54
   Section 10.09   Successor Agent ........................................   55
   Section 10.10   Collateral Matters .....................................   55
   Section 10.11   Assignments, Participations, Etc .......................   56


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   Section 10.12   Other Matters Pertaining to the Agent ..................   58

ARTICLE XI MISCELLANEOUS ..................................................   59
   Section 11.01   Notices ................................................   59
   Section 11.02   Survival of Agreement ..................................   60
   Section 11.03   Governing Law ..........................................   60
   Section 11.04   Modification of Agreement ..............................   61
   Section 11.05   Costs and Expenses .....................................   61
   Section 11.06   Waivers ................................................   62
   Section 11.07   Indemnification ........................................   62
   Section 11.08   Separability of Provisions; Obligations Several ........   63
   Section 11.09   Counterparts ...........................................   63
   Section 11.10   Entire Agreement .......................................   63
   Section 11.11   Headings ...............................................   64
   Section 11.12   Successors and Assigns .................................   64
   Section 11.13   Gender and Number ......................................   64
   Section 11.14   Exhibits ...............................................   64
   Section 11.15   Notification of Addresses, Lending Offices, Etc ........   64
   Section 11.16   No Third Parties Benefited .............................   64
   Section 11.17   Equitable Relief .......................................   64
   Section 11.18   Notice of Claims; Claims Bar ...........................   65
   Section 11.19   Waiver of Punitive Damages .............................   65
   Section 11.20   Consent to Jurisdiction ................................   65
   Section 11.21   Waiver of Jury Trial ...................................   65
   Section 11.22   Currency Indemnity .....................................   66
   Section 11.23   Release of Lien ........................................   66
   Section 11.24   Patriot Act ............................................   66
   Section 11.25   TIME OF THE ESSENCE ....................................   66
   Section 11.26   Obligations Joint and Several ..........................   67
   Section 11.27   Amendment and Restatement ..............................   68

EXHIBITS
EXHIBIT A   Form of Amended and Restated Initial Loan Note
EXHIBIT B   Form of Additional Loan Note
EXHIBIT C   Form of Drawdown Request
EXHIBIT D   Form of Monthly Compliance Report
EXHIBIT E   Registered Ship Mortgage
EXHIBIT F   Amended and Restated Pledge Agreement
EXHIBIT G   Reserved
EXHIBIT H   Form of Assignment and Acceptance

SCHEDULES
SCHEDULE I      Initial Loan Commitment and Additional Loan Commitment
SCHEDULE 4.06   Litigation
SCHEDULE 4.10   ERISA
SCHEDULE 4.11   Ownership/Equity Interests
SCHEDULE 4.14   Environmental Matters


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SCHEDULE 4.18   Indebtedness
SCHEDULE 4.20   Vessel Information/Noncompliance with Maritime Rules and
                   Regulations
SCHEDULE 4.22   Conditions or Recommendations Affecting Class
SCHEDULE 4.25   Principal Place of Business and Chief Executive Office


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                                                               EXECUTION VERSION

     AMENDED AND RESTATED CREDIT AGREEMENT (as amended, supplemented and
otherwise modified from time to time, this "Agreement") dated as of June 1, 2004
and amended and restated as of February 1, 2005, among Henley Maritime Corp., a
company existing under the laws of the Marshall Islands (together with its
successors and assigns, "Henley"), Vernon Maritime Corp., a company existing
under the laws of the Marshall Islands (together with its successors and
assigns, "Vernon"), Arden Maritime Corp., a company existing under the laws of
the Marshall Islands (together with its successors and assigns, "Arden"), and
Oldcastle Shipping Corp., a company existing under the laws of the Marshall
Islands (together with its successors and assigns, "Oldcastle" and together with
Henley, Vernon, Arden and each other Person which may hereafter execute and
deliver a supplement hereto in form and substance satisfactory to the Agent and
the Lenders, each a "Borrower" and together the "Borrowers"), TBS International
Limited, a company existing under the laws of Bermuda, as Guarantor (together
with its successors and assigns, the "Guarantor"), GMAC Commercial Finance LLC
("GMAC CF") and each other financial institution which may hereafter execute and
deliver an Assignment and Acceptance with respect to this Agreement pursuant to
Section 10.11 (any one individually, a "Lender", and collectively, the
"Lenders"), and GMAC CF, as administrative agent on behalf of the Lenders (when
acting in its capacity as administrative agent under this Agreement or under any
other Transaction Document, herein referred to, together with any successor
administrative agent, as the "Agent").

                              PRELIMINARY STATEMENT

     Pursuant to its respective Existing Charter, each of Arden and Vernon have
duly exercised its purchase option in respect of the Vessel subject thereto,
Henley has acquired all right, title and interest in and to the Tuckahoe and
Oldcastle has acquired all right, title and interest in and to the Taino Maiden.
The Borrowers desire to, jointly and severally, obtain the Loans from the
Lenders in an aggregate amount up to the Aggregate Loan Commitment. In order to
induce the Lenders to make the Loans to the Borrowers, the Guarantor has agreed
to guarantee the Obligations of the joint and several obligations of the
Borrowers hereunder. The Borrowers and the Guarantor have agreed to grant to the
Agent on its behalf and on the behalf of the Lenders a first priority, perfected
security interest in the Collateral to secure such Obligations. The Lenders are
willing to make the Loans in an amount up to the Aggregate Loan Commitment
pursuant to this Agreement and upon the terms and subject to the conditions set
forth herein and in reliance on the representations and warranties set forth
herein. As of the Drawdown Date for the first Additional Loan, the aggregate
outstanding principal balance of the Loans (including the first Additional Loan)
is $20,312,500.00.

     NOW THEREFORE, in consideration of the premises and mutual agreements
herein contained, and for good and valuable consideration, the receipts and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:

                                    ARTICLE I
                                  DEFINITIONS

     Section 1.01 Definitions. Capitalized terms used herein, but not otherwise
defined herein shall have the meanings assigned to such terms in Appendix A
hereto. All terms defined



in this Agreement shall have the defined meanings when used in any agreement,
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein.

     Section 1.02 Interpretation.

          (a) Words importing the singular number only shall include the plural
     and vice versa, and the use of any gender herein shall be deemed to include
     any other gender.

          (b) Words importing persons shall include companies, firms,
     corporations, partnerships, unincorporated associations and their
     respective successors and assigns.

          (c) References herein to "Articles", "Sections", "Subsections",
     "paragraphs", and other subdivisions without reference to a document are to
     designated Articles, Sections, Subsections, paragraphs and other
     subdivisions of this Agreement.

          (d) A reference to a Subsection without further reference to a Section
     is a reference to such Subsection as contained in the same Section in which
     the reference appears, and this rule shall also apply to paragraphs and
     other subdivisions.

          (e) The term "including" or "include" shall mean without limitation by
     reason of enumeration.

     Section 1.03 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP and all financial
statements submitted pursuant to this Agreement shall be prepared in accordance
with, and all financial data submitted pursuant hereto shall be derived from
financial statements prepared in accordance with, GAAP. With respect to the
calculations of the ratios set forth in this Agreement, the components of such
calculations are to be determined in accordance with GAAP consistently applied.
With respect to any ratio analysis required to be performed as of the most
recently completed fiscal quarter, the most recently completed fiscal quarter
shall mean the fiscal quarter for which financial statements were required
hereunder to have been delivered. All references to the Guarantor's financial
statements shall mean the consolidated financial statements of the Guarantor and
its consolidated subsidiaries. All references to a Borrower's financial
statements shall mean the consolidated financial statements of such Borrower and
its consolidated subsidiaries.

     Section 1.04 Computation of Time Periods. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each means "to but excluding."

                                   ARTICLE II
                       INITIAL LOANS AND ADDITIONAL LOANS

     Section 2.01 Initial Loans.

          (a) Upon satisfaction of the conditions precedent set forth in Article
     V and subject to and upon the terms and conditions of this Agreement, the
     Lenders shall make


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     the Initial Loans available to the Borrowers, on a joint and several basis,
     for general corporate purposes of the Borrowers and their Affiliates.

          (b) Each Lender, relying upon each of the representations and
     warranties of the Credit Parties and the guaranty of the Guarantor, hereby
     severally and not jointly agrees with each Borrower that, upon satisfaction
     of the conditions precedent set forth in Article V and subject to and upon
     the terms and conditions of this Agreement, it will, on the initial
     Drawdown Date, make the Initial Loans available to the Borrowers in an
     aggregate amount not to exceed its Loan Commitment ratably with the other
     Lenders according to their respective Loan Commitments; provided that, the
     Initial Loans have been allocated such that Five Million Five Hundred
     Thousand Dollars ($5,500,000) have been advanced in respect of the Mohegan
     Princess, Five Million Five Hundred Thousand Dollars ($5,500,000) have been
     advanced in respect of the Tayrona Princess and Four Million Dollars
     ($4,000,000) have been advanced in respect of the Tuckahoe; provided,
     however, that the Initial Loans made available by the Lenders to the
     Borrowers shall not exceed, in the case of the Tayrona Princess and the
     Mohegan Princess, 68.75% of the Vessel Cost thereof and, in the case of the
     Tuckahoe, 64.00% of the Vessel Cost thereof. The maximum aggregate amount
     of all Loans which may be outstanding at any time under this Agreement is
     the Aggregate Loan Commitment, as may be reduced pursuant to Sections 2.06
     and 2.07.

          (c) Reserved.

          (d) The Borrowers shall, at least two (2) Business Days prior to the
     initial Drawdown Date, deliver a Drawdown Request to the Agent in writing
     addressed to the Agent. Such Drawdown Request shall be effective on receipt
     by the Agent and shall be irrevocable. The Initial Loans shall be LIBOR
     Loans.

          (e) Such Drawdown Request shall be deemed to constitute a
     representation and warranty by each Borrower: (i) that the representations
     and warranties stated in this Agreement and the other Transaction Documents
     are true, correct and complete on and as of the date of such Drawdown
     Request and will be true and correct on and as of the relevant Drawdown
     Date as if made on such date (unless, in each case, such representation and
     warranty is expressly limited to an earlier date), (ii) that after giving
     effect to the borrowing made pursuant to such Drawdown Request, the
     aggregate principal amount of all outstanding Loans will not exceed the
     Aggregate Loan Commitment, (iii) that no Default or Event of Default has
     occurred and is continuing, (iv) the Credit Parties have performed all
     agreements contained in the Transaction Documents required to be performed
     on or prior to the date thereof, and (v) no proceeding is pending which
     would prohibit consummation of the transactions, contemplated by the
     Transaction Documents. The Initial Loans made by the Lenders to the
     Borrowers shall be evidenced by one or more promissory notes in the form of
     Exhibit A attached hereto (each, as the same from time to time may be
     amended, restated, supplemented, renewed or otherwise modified, an "Initial
     Loan Note"), duly executed by each Borrower, dated as of the applicable
     Drawdown Date. Each Lender (or the Agent if only one Initial Loan Note
     shall be issued to the Agent for the benefit of the Lenders) shall, and is
     hereby authorized by each Borrower to, record on the schedule attached to
     its


                                       -3-



Initial Loan Note (or on a continuation of such schedule attached to such
Initial Loan Note) and make a part thereof and/or such Lender's books and
records, an appropriate notation evidencing the date and amount of each such
Lender's Proportionate Share of such Initial Loan, which notation, absent
manifest error, shall be prima facie evidence of the amount of the relevant
Initial Loan. The Agent shall make notations in its books and records regarding
the date and the amount of each repayment or prepayment of principal and payment
of interest made by the Borrowers of the Initial Loans. The Agent is irrevocably
authorized by Borrowers to endorse each Initial Loan Note and the Agent's record
shall be conclusive absent manifest error; provided, however, that the failure
of the Agent to make, or an error in making, any such recordation or notation
with respect to any Initial Loans shall not limit or otherwise affect the
Obligations of the Borrowers hereunder or under the Transaction Documents.

     (f) If one or more Lenders defaults in its obligation to pay to the
Borrowers its Proportionate Share of the Initial Loan (the aggregate amount of
such defaulted obligations being herein called the "Initial Unfunded Amount"),
then upon notice from the Agent, each Non-Defaulting Lender shall promptly pay
to the Agent, in immediately available funds, an amount equal to the lesser of
(x) such Non-Defaulting Lender's Proportionate Share (based upon the relative
Commitments of the Non-Defaulting Lenders) of the Initial Unfunded Amount and
(y) the unused portion of such Non-Defaulting Lender's Commitment (after taking
into account such Non-Defaulting Lender's Outstanding Loan Amount thereunder).
The Agent shall then remit such funds to the Borrowers on behalf of each such
Non-Defaulting Lender. A Defaulting Lender shall forthwith upon demand pay to
the Agent for the account of each such Non-Defaulting Lender the amount paid by
such Non-Defaulting Lender on behalf of such Defaulting Lender, together with
interest thereon, for each day from the date such payment was made until the
date such Non-Defaulting Lender has been paid such amounts in full, at a rate
per annum equal to the Federal Funds Effective Rate plus 2.00%.

Section 2.02 Additional Loans.

     (a) The Lenders may, in their sole discretion and on terms and conditions
acceptable to the Lenders, make Additional Loans available to the Borrowers for
the purpose of refinancing Indebtedness in respect of or acquiring, directly or
through one or more Wholly-Owned Subsidiaries of the Guarantor, additional
Vessels. Following receipt of a Drawdown Request, the Lenders will determine
whether they will agree to make Additional Loans available to the Borrowers on a
joint and several basis. If the Lenders decline to make the proposed Additional
Loans, such Drawdown Request shall be deemed to be cancelled automatically. In
the event that the Lenders elect to make available Additional Loans, then the
Borrowers, the Guarantor, the Agent and the Lenders shall set forth in a
schedule, which together with the related Drawdown Request shall be deemed a
part of this Agreement, the amortization of such Additional Loans, any
Make-Whole Amount payable in connection with any optional prepayment thereof and
such other terms and conditions as may be agreed upon by the Lenders, the Agent
and such Borrower.


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     (b) Each of the Lenders, relying upon each of the representations and
warranties of the Credit Parties and the guaranty of the Guarantor, hereby
severally and not jointly agrees with each Borrower that, upon its agreement to
make Additional Loans available, satisfaction of the applicable conditions
precedent set forth in Article V and subject to and upon the terms and
conditions of this Agreement and such other terms and conditions acceptable to
the Lenders, it will, on each Drawdown Date, make Additional Loans available to
the applicable Borrower in an aggregate amount not to exceed its Loan Commitment
ratably with the other Lenders according to their respective Loan Commitments.
The maximum aggregate amount of all Loans which may be outstanding at any time
under this Agreement is the Aggregate Loan Commitment, as may be reduced
pursuant to Sections 2.06 and 2.07. Each Loan shall be drawn in a Minimum
Borrowing Amount.

     (c) The Borrowers shall, (i) in the case of a LIBOR Loan, at least five (5)
Business Days prior to a Drawdown Date and (ii) in the case of a Base Rate Loan,
at least two (2) Business Days prior to a Drawdown Date, deliver a Drawdown
Request to the Agent in writing addressed to the Agent. Each Drawdown Request
shall be effective on receipt by the Agent and shall be irrevocable.

     (d) Each Drawdown Request shall be deemed to constitute a representation
and warranty by the Borrowers that: (i) the representations and warranties of
the Credit Parties set forth herein are true, correct and complete on and as of
the date of such Drawdown Request and will be true and correct on and as of the
relevant Drawdown Date as if made on such date (unless, in each case, such
representation and warranty is expressly limited to an earlier date), (ii) that
after giving effect to the borrowing made pursuant to such Drawdown Request, the
sum of the outstanding Loans will not exceed the Aggregate Loan Commitment,
(iii) that no Default or Event of Default has occurred and is continuing (iv)
the Credit Parties have performed all agreements contained in the Transaction
Documents required to be performed on or prior to the date thereof, and (v) no
proceeding is pending which would prohibit consummation of the transactions,
contemplated by the Transaction Documents. The Additional Loans made by the
Lenders to the Borrowers shall be evidenced by one or more promissory notes in
the form of Exhibit B attached hereto (each, as the same from time to time may
be amended, restated, supplemented, renewed or otherwise modified, an
"Additional Loan Note"), duly executed by each Borrower, dated as of the
applicable Drawdown Date. Each Lender (or the Agent if only one Additional Loan
Note shall be issued to the Agent for the benefit of the Lenders) shall, and is
hereby authorized by each Borrower to, record on the schedule attached to its
Additional Loan Note (or on a continuation of such schedule attached to such
Additional Loan Note) and make a part thereof, an appropriate notation
evidencing the date and amount of each such Lender's Proportionate Share of such
Additional Loans, which notation, absent manifest error, shall be prima facie
evidence of the amount of the relevant Additional Loans. The Agent shall make
notations in its books and records regarding the date and the amount of each
repayment or prepayment of principal and payment of interest made by the
Borrowers of an Additional Loan. The Agent is irrevocably authorized by Borrower
to endorse each Additional Loan Note and the Agent's record shall be conclusive
absent manifest error; provided, however, that the failure of the Agent to make,
or an error in making, any such recordation or notation with


                                       -5-



respect to any Additional Loan shall not limit or otherwise affect the
Obligations of the Borrowers hereunder or under the Transaction Documents.

     (e) If one or more Lenders defaults in its obligation to pay to the
applicable Borrower its Proportionate Share of any Additional Loan (the
aggregate amount of such defaulted obligations being herein called the
"Additional Unfunded Amount"), then upon notice from the Agent, each
Non-Defaulting Lender shall promptly pay to the Agent, in immediately available
funds, an amount equal to the lesser of (x) such Non-Defaulting Lender's
Proportionate Share (based upon the relative Commitments of the Non-Defaulting
Lenders) of the Initial Unfunded Amount and (y) the unused portion of such
Non-Defaulting Lender's Commitment (after taking into account such
Non-Defaulting Lender's Outstanding Loan Amount thereunder). The Agent shall
then remit such funds to the applicable Borrower on behalf of each such
Non-Defaulting Lender. A Defaulting Lender shall forthwith upon demand pay to
the Agent for the account of each such Non-Defaulting Lender the amount paid by
such Non-Defaulting Lender on behalf of such Defaulting Lender, together with
interest thereon, for each day from the date such payment was made until the
date such Non-Defaulting Lender has been paid such amounts in full, at a rate
per annum equal to the Federal Funds Effective Rate plus 2.00%

Section 2.03 Interest on the Loans.

     (a) Each Loan shall bear interest on the outstanding principal amount
thereof and interest on each (i) LIBOR Loan shall be payable on each Payment
Date at a rate per annum equal to the Floating Interest Rate for the related
Interest Period from the date when made and continued until paid in full and
(ii) Base Rate Loan shall be payable on each Payment Date at a rate per annum
equal to the daily average Fixed Interest Rate for the period from the date when
made and continued until paid in full. The Agent shall determine the interest
payable on the outstanding principal balance of the Loans and shall advise the
Borrowers thereof three (3) Business Day prior to each Payment Date. Subject to
the terms of this Agreement relating to prepayments of Loans and the
acceleration of maturities such interest shall be due on each Payment Date and
on the Maturity Date.

     (b) The duration of each Interest Period for each LIBOR Loan shall be one
month.

     (c) Each overdue Loan, together with all unpaid interest, fees and other
Obligations payable hereunder and under the other Transaction Documents, will
bear interest at the lesser of (x) the Overdue Rate and (y) the maximum rate
permitted be applicable on any part of the principal amount and interest and
other Obligations due thereunder not paid when due (whether at stated maturity,
by acceleration or otherwise), for any period during which such Loan or other
Obligations are overdue.

     Section 2.04 Maximum Interest Rate. In no event shall the interest charged
with respect to a Loan exceed the maximum amount permitted by applicable law. If
at any time the Interest Rate exceeds the maximum rate permitted by applicable
law, then the rate of interest to accrue pursuant to this Agreement and such
Loan shall be limited to the maximum rate permitted


                                       -6-



by applicable law, but any subsequent reductions in LIBOR shall not reduce the
interest to accrue on such Loan below the maximum amount permitted by applicable
law until the total amount of interest accrued on such Loan equals the amount of
interest that would have accrued if a varying rate per annum equal to the
Interest Rate had at all times been in effect. If the total amount of interest
paid or accrued on a Loan under the foregoing provisions is less than the total
amount of interest that would have accrued if the Interest Rate had at all times
been in effect, then the applicable Borrower agrees to pay to the Lenders an
amount equal to the difference between (a) the lesser of (i) the amount of
interest that would have accrued if the maximum rate permitted by applicable law
had at all times been in effect or (ii) the amount of interest that would have
accrued if the Interest Rate had at all times been in effect, and (b) the amount
of interest accrued in accordance with the other provisions of this Agreement.

     Section 2.05 Repayment. The Loans shall amortize as provided herein and
shall pay principal thereof and interest thereon on each Payment Date. Each
Borrower shall repay all outstanding Loans (subject to such reduction and
prepayments as hereinafter set forth) together with all Obligations then due and
payable on the Maturity Date.

     Section 2.06 Mandatory Permanent Reduction of Commitments.

          (a) The aggregate Initial Loan Commitment shall be permanently reduced
     on each Initial Loan Reduction Date as follows:





------------------------------------------------------------------------------------------------
                                                          INITIAL LOAN COMMITMENT
       INITIAL LOAN REDUCTION DATE                            REDUCTION AMOUNT
------------------------------------------------------------------------------------------------

Each Payment Date after the Closing Date   Three Hundred Twelve Thousand Five Hundred Dollars
until June 30, 2006                        ($312,500)
------------------------------------------------------------------------------------------------
Each Payment Date after June 30, 2006      Two Hundred Eight Thousand Three Hundred Thirty Three
until the Maturity Date                    and 33/100 Dollars ($208,333.33)
------------------------------------------------------------------------------------------------
Maturity Date                              Outstanding Principal Balance of all Initial Loans
------------------------------------------------------------------------------------------------



          (b) Each Additional Loan Commitment shall be permanently reduced on
     each Additional Loan Reduction Date in accordance with the schedule
     delivered pursuant to Section 2.02(a).

          (c) If, on any Payment Date, the outstanding principal amount of the
     Loans as of such date exceeds the Aggregate Loan Commitment (as scheduled
     to be reduced on such Payment Date), then the Borrowers shall, on such
     Payment Date, make a mandatory repayment of the Loans in the amount (the
     "Reduction Amount") of such excess.

     Section 2.07 Optional Prepayment of Loans.

          (a) As long as no Default or Event of Default has occurred and is
     continuing, each Borrower shall have the right, upon sixty (60) days prior
     written notice to the Agent and the Lenders, to prepay on any Payment Date
     the aggregate outstanding


                                       -7-



     principal balance (but not less than the entire aggregate outstanding
     principal balance, subject to the next succeeding sentence) of all Loans
     together with the Make-Whole Amount therefor. With the prior written
     consent of the Agent and as long as no Default or Event of Default has
     occurred and is continuing, each Borrower shall have the right to prepay on
     any Payment Date the outstanding principal balance of its respective Loan
     (as identified in Section 2.01(b) hereof and in each supplement hereto),
     together with the Make-Whole Amount therefor.

          (b) Any prepayment of the Loans pursuant to this Section 2.07 shall be
     subject to the condition that, on the date of prepayment, all accrued
     interest to the date of such prepayment shall be paid in full, together
     with any and all other amounts then due and payable to the Lenders and the
     Agent.

     Section 2.08 Application of Payments. Unless otherwise expressly provided
herein, each payment made on a Loan will be applied, first to the payment of all
fees and expenses due to the Agent and the Lenders under this Agreement, second,
to the payment of interest on overdue interest at the Overdue Rate on such Loan
to the date of such payment, third, to the payment of interest on any overdue
Reduction Amount or other principal amount not paid when due, at the Overdue
Rate on such Loan to the date of such payment, fourth, to the payment of accrued
interest on such Loan to the date of such payment, fifth, to the payment of any
overdue Reduction Amount or other principal amount past due on such Loan, sixth,
to the payment of the Reduction Amount of such Loan then due, and seventh, to
the payment of any and all other Obligations then due and payable.

     Section 2.09 Manner of Payments.

          (a) All payments made pursuant to the Credit Agreement shall be made
     without set-off or counterclaim and shall be made in immediately available
     funds by the Borrowers to the Agent for the account of the Lenders in
     accordance with their Proportionate Share. All such payments shall be made
     to the Agent, prior to 11:00 am., New York City time, on the date due to
     the Agent's account at Bank One, Detroit, Michigan, ABA#: 072000326,
     Account of GMAC Commercial Finance LLC, Account # 363-301-424, Reference:
     TBS, or at such other place as may be designated by the Agent to the
     Borrowers in writing. Any payments received after 11:00 a.m., New York
     City time, shall be deemed received on the next Business Day. The Agent
     shall promptly remit to each Lender, in the same type of funds as payment
     was received, each Lender's Proportionate Share according to its respective
     interest of all such payments received by the Agent for the account of such
     Lender. Subject to the definition of "Payment Date", whenever any payment
     to be made hereunder shall be stated to be due on a date other than a
     Business Day, such payment may be made on the next succeeding Business Day
     with the same effect as if made on the due date but interest shall continue
     to accrue until the date of payment.

          (b) If any Lender or other holder of a Note shall obtain any payment
     or other recovery (whether voluntary, involuntary, by application of
     offset, set-off, banker's lien, counterclaim or otherwise) on account of
     principal of or interest on any Note in excess of its Proportionate Share
     of payments and other recoveries obtained by all


                                       -8-



     Lenders or other holders, such Lender or other holder shall purchase from
     the other Lenders or holders such participation in the Notes held by them
     as shall be necessary to cause such purchasing Lender or other holder to
     share the excess payment or other recovery with each of them; provided,
     however, that if all or any portion of the excess payment or other recovery
     is thereafter recovered from such purchasing holder, the purchase shall be
     rescinded and the purchase price restored to the extent of such recovery,
     but without interest. Each respective Borrower agrees that the Lender so
     purchasing a participation from the other Lenders under this Section 2.
     09(b) may exercise all its rights of payment, including the right of
     set-off, with respect to such participation as fully as if such Lender were
     the direct creditor of such Borrower in the amount of the participation.

     Section 2.10 Register of Notes; Lost and Mutilated Notes.

          (a) The Agent will maintain at its principal office a register (the
     "Register") for the purpose of registering the Notes and registering
     transfers and exchanges of Notes. The Person in whose name a Note is
     registered in accordance with this Section 2.10(a) shall for all purposes
     hereof be deemed a Lender, and none of the Agent, the Borrowers and any of
     their respective agents shall be affected by notice to the contrary. Upon
     surrender for transfer or exchange of any Note at the principal office of
     the Agent, the Borrowers will execute and deliver (in the case of any such
     transfer, in the name of the designated transferee or transferees or, in
     the case of an exchange, in the name of the holder thereof), one or more
     new Notes of the same series of a like aggregate principal amount. The
     Agent will not be required to register or exchange any surrendered Note as
     above provided during the fifteen (15) days immediately preceding any
     Payment Date. Every Note presented or surrendered for transfer or exchange
     will be duly endorsed (or be accompanied by a written instrument of
     transfer in form satisfactory to the Agent) duly executed by the holder
     thereof or his attorney duly authorized in writing. Any Note issued in a
     registration of transfer or exchange will carry the same rights to interest
     (unpaid and to accrue) carried by the Note so transferred or exchanged so
     that there will not be any loss or gain of interest on such Note. The Agent
     shall mark on each new Note (i) the dates to which principal and interest
     have been paid on the old Note and (ii) all payments and prepayments of
     principal previously made on such old Note which are allocable to such new
     Note, which markings, absent manifest error, shall be prima facie evidence
     of the foregoing.

          (b) If any Note has been mutilated, lost, stolen or destroyed, the
     Borrowers will execute and deliver a new Note of like date and tenor in
     exchange and substitution for, and upon cancellation of, such mutilated
     Note or in lieu of and in substitution for such lost, stolen or destroyed
     Note; provided, however, that the Borrowers will so execute and deliver
     such new Note only if the applicable holder has paid the reasonable
     expenses and charges of the Borrowers in connection therewith and, in the
     case of a lost, stolen or destroyed Note, (i) has filed with the Borrowers
     and the Agent evidence satisfactory to the Agent that such Note was lost,
     stolen or destroyed, and (ii) has furnished to the Agent and the Borrowers
     reasonable indemnity against any loss, claim, expense or liability arising
     as a result of such Note being lost, stolen or destroyed. Neither the
     Borrowers nor the Agent shall have any obligation to indemnify or reimburse
     such holder for any losses,


                                       -9-



     claims, expenses or liabilities that it may suffer or incur in connection
     with any lost, stolen or destroyed Note. If any such Note has matured or is
     otherwise subject to payment, instead of issuing a new Note the Borrowers
     may pay the same without surrender thereof. Any Note issued in exchange for
     a lost, stolen, destroyed or mutilated Note will carry the same rights to
     interest (unpaid and to accrue) carried by the Note lost, stolen, destroyed
     or mutilated so that there will not be any loss or gain of interest on such
     Note. The Agent shall mark on each new Note (A) the dates to which interest
     has been paid on the old Note and (B) all payments and prepayments of
     principal previously made on such old Note which are allocable to such new
     Note, which markings, absent manifest error, shall be prima facie evidence
     of the foregoing.

          (c) Any service charge made or expense incurred by the Agent for any
     such registration, transfer or exchange shall be paid by the holder
     requesting such registration, transfer or exchange. Upon the issuance of a
     new Note or Notes pursuant to Section 2.10(a) or 2.10(b) hereof, each of
     the applicable Borrowers and the Agent may require from the party
     requesting such new Note or Notes payment of a sum to reimburse the
     applicable Borrower for, or to provide funds for, the payment of any tax or
     other governmental charge in connection therewith or any charges and
     expenses connected with such tax or other governmental charge paid or
     payable by any Borrower.

     Section 2.11 Change in Circumstances.

          (a) If after the date of this Agreement, there shall have occurred the
     adoption of any applicable law, rule or regulation regarding capital
     adequacy, or any change therein, or any change in the interpretation or
     administration thereof by any Governmental Authority, central bank or
     comparable agency, that a Lender has reasonably determined has or would
     have the effect of reducing the rate of return on the Lender's capital or
     the capital of its direct or indirect holding company or the capital of the
     Lender's source of funding to a level below that which such Lender or its
     holding company or its funding source would have achieved but for such
     adoption, change or compliance (taking into consideration such Lender's or
     its holding company's or its funding source's policies with respect to
     capital adequacy) by an amount which such Lender, in its reasonable
     judgment, shall deem material, then from time to time, the Borrowers shall
     pay to such Lender such additional amount or amounts as will compensate
     such Lender or its holding company or its funding source for such
     reduction. A certificate as to such amounts submitted to the Borrowers by
     such Lender shall be conclusive and binding for such purposes, absent
     manifest error; provided, however, that the determination of such
     additional amount or amounts shall be made in good faith in a manner
     generally consistent with such Lender's standard practice.

          (b) If after the date of this Agreement, there shall have occurred the
     adoption of any applicable law, rule or regulation regarding the
     maintenance of reserves, special deposits, compulsory loans or similar
     requirements against assets held by, deposits or liabilities in or for the
     account of, advances, loans or other extensions of credit by, or any other
     acquisition of funds by, any office, affiliate or funding source of such
     Lender which is not otherwise included in the determination of the Interest
     Rate hereunder, or any change therein, or any change in the interpretation
     or administration


                                      -10-



     thereof by any Governmental Authority, central bank or comparable agency,
     that a Lender has reasonably determined has or would have the effect of
     increasing the cost to such Lender or such Lender's direct or indirect
     holding company or such Lender's funding source, by an amount which such
     Lender deems to be material, with respect to making, continuing or
     maintaining the LIBOR Loans, or to reduce any amount receivable hereunder
     in respect thereof, then, in any such case, the applicable Borrower shall
     promptly pay such Lender, upon its demand, any additional amount or amounts
     as will compensate such Lender or holding company or funding source for
     such increased cost or reduced amount receivable. A certificate as to such
     amounts submitted to such Borrower by such Lender shall be conclusive and
     binding for such purposes, absent manifest error; provided, however, that
     the determination of such additional amount or amounts shall be made in
     good faith in a manner generally consistent with such Lender's standard
     practice.

     Section 2.12 Illegality. Notwithstanding any other provision herein, if any
Change in Law shall make it unlawful for any Lender to make or maintain any
portion of a Loan as a LIBOR Loan, such Lender shall so notify the Borrowers and
the Agent in writing and interest on such portion of such Loan shall thereafter
be calculated by reference to the Base Rate. If any such change in the method of
calculating interest is required, pursuant to such change in law, to be made on
a day which is not the last day of an Interest Period, the applicable Borrower
shall pay to such Lender the amounts, if any, as may be required pursuant to
Section 2.14.

     Section 2.13 Taxes.

          (a) Any and all payments on account of any Obligations shall be made
     free and clear of and without deduction for any Taxes (other than, and
     excluding, Excluded Taxes); provided, however, that if any Borrower shall
     be required to withhold or deduct any Indemnified Taxes from any such
     payment, the amount of such payment shall be increased as necessary so that
     after making all required withholdings or deductions (including
     withholdings or deductions applicable to additional sums payable under this
     Section 2.13) the Lenders receive an amount equal to the sum that they
     would have received had no such deductions been made. Such Borrower shall
     pay the full amount withheld or deducted to the relevant Governmental
     Authority in accordance with applicable law.

          (b) Each Borrower shall indemnify each Indemnified Party within twenty
     (20) days after written demand therefor for the full amount of any
     Indemnified Taxes payable with respect to or on account of any Obligation
     (including Taxes imposed on or attributable to amounts payable under this
     Section 2.13) and any penalties, interest, and reasonable expenses arising
     therefrom or with respect thereto, whether or not such Indemnified Taxes
     were correctly or legally imposed or asserted by the relevant Governmental
     Authority. In the case of Indemnified Taxes paid by an Indemnified Party, a
     certificate as to the amount of such payment or liability delivered to the
     Borrowers by such Indemnified Party shall be conclusive absent manifest
     error.

          (c) As soon as practicable after any payment of Indemnified Taxes or
     Other Taxes by the Borrowers to a Governmental Authority, the Borrowers
     shall deliver to such Indemnified Party the original or a certified copy of
     a receipt issued by such


                                      -11-



     Governmental Authority evidencing such payment, a copy of the return
     reporting such payment or other evidence of such payment reasonably
     satisfactory, to such Indemnified Party.

          (d) Each Indemnified Party not incorporated or organized under the
     laws of the United States or a state thereof shall deliver to the Borrowers
     and the Agent prior to the first date on which any payment is due such
     entity hereunder two duly completed copies of United States Internal
     Revenue Service Forms W-8BEN or W-8ECI, or successor applicable form, as
     the case may be, certifying in each case that such entity is entitled to
     receive payments under the Loan without withholding or deduction of any
     United States federal income tax. Each entity required to deliver Forms
     W-8BEN or W-8ECI, or successor applicable form pursuant to the preceding
     sentence, further undertakes to deliver to the Borrowers and the Agent two
     further copies of W-8BEN or W-8ECI, or successor applicable forms, as the
     case may be, on or before the date that any such form expires or becomes
     obsolete or after the occurrence of any event requiring a change in the
     most recent forms previously delivered by it to the Borrowers and the
     Agent, unless in any such case an event (including, without limitation, any
     change in treaty, law or regulation or in the interpretation thereof) has
     occurred prior to the date on which any such delivery otherwise would be
     required which renders all such forms inapplicable or which would prevent
     such entity from duly completing and delivering any such form. The
     Borrowers shall not be obligated to pay any Indemnified Party any amounts
     pursuant to this Section 2.13 in respect of Indemnified Taxes that would
     not have been imposed but for failure of the Indemnified Party to comply
     with this Section 2.13(d).

          (e) Reserved.

          (f) The Borrowers shall pay any Other Taxes to the relevant
     Governmental Authority in accordance with applicable law.

          (g) If a Lender or the Agent shall become aware that it is entitled to
     claim a refund from a Governmental Authority in respect of Taxes or Other
     Taxes as to which it has been indemnified by a Borrower, or with respect to
     which any Borrower has paid additional amounts, pursuant to this Section
     2.13, it shall promptly notify such Borrower of the availability of such
     claim and shall, within thirty (30) days after receipt of a request by such
     Borrower, make a claim to such Governmental Authority for such refund at
     such Borrower's expense. If a Lender or the Agent receives a refund in
     respect of any Taxes or Other Taxes with respect to which any Borrower has
     paid additional amounts pursuant to this Section 2.13, it shall within
     thirty (30) days from the date of such receipt pay over such refund to such
     Borrower (but only to the extent of indemnity payments made, or additional
     amounts paid, by such Borrower under this Section 2.13 with respect to the
     Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
     expenses of such Lender or the Agent and without interest (other than
     interest paid by the relevant Governmental Authority with respect to such
     refund); provided, however, that each Borrower, upon the request of such
     Lender or the Agent, agrees to repay the amount paid over to such Borrower
     (plus penalties, interest or other charges payable to the relevant
     Governmental Authority) to such Lender or the Agent in the event such
     Lender or the Agent is required to repay such refund to such Governmental
     Authority.


                                      -12-



          (h) The agreements in this Section 2.13 shall survive the termination
     of this Agreement and the Transaction Documents and the payment of all
     amounts payable hereunder and thereunder.

     Section 2.14 Break Funding Payments. Each Borrower agrees to indemnify each
Lender and to hold each Lender harmless from any loss or expense which such
Lender may sustain or incur as a consequence of (a) default by such Borrower in
making a borrowing of a LIBOR Loan after such Borrower has given irrevocable
notice requesting such borrowing in accordance with Section 2.01 or 2.02 or (b)
a prepayment of a LIBOR Loan on any day other than the last day of the Interest
Period applicable to such Loan. The provisions of this Section 2.14 shall
survive the termination of the Transaction Documents and the payment of all
amounts payable hereunder and thereunder. A certificate as to any additional
amounts payable pursuant to this Section 2.14 submitted by such Lender to such
Borrower shall (i) set forth the basis for requesting such amounts and (ii) be
conclusive absent manifest error.

     Section 2.15 Alternate Rate of Interest. If prior to the commencement of
any Interest Period: (a) the Agent determines (which determination shall be
reasonably made and shall be conclusive absent manifest error) that, by reason
of changes arising after the date of this Agreement affecting the interbank
LIBOR market, or any Lender's (or its funding source's) position in such market,
adequate and reasonable means do not exist for ascertaining Adjusted LIBOR, for
such Interest Period, or (b) the Agent is advised by any Lender that, by reason
of changes arising after the date of this Agreement affecting the interbank
LIBOR market, or any Lender's (or its funding source's) position in such market,
Adjusted LIBOR for such Interest Period will not adequately and fairly reflect
the cost to such Lender of making or maintaining such Lender's Proportionate
Share of the Loans during such Interest Period, then the Agent shall promptly
give notice thereof to the Borrowers, any until the Agent notifies the Borrowers
that the circumstances giving rise to such notice no longer exist, the Loans
shall not be LIBOR Loans and interest on the Loans shall be calculated by
reference to the Base Rate (in the case of clause (a) above) or such Lender's
Proportionate Share of the Loan (in the case of clause (b) above) shall not be a
LIBOR Loan and interest on such portion of the Loans shall be calculated by
reference to the Base Rate. In the case of either (a) or (b) above, each Lender
agrees to use reasonable efforts to provide the Borrowers with terms and
conditions similarly extended to such Lender's other similarly affected
borrowers as a result of the occurrence of (a) or (b) above; provided that, for
greater certainty, with respect to GMAC, as Lender, "Lender", as used in this
sentence, means GMAC Commercial Finance LLC Equipment Finance Division and not
any other division or Affiliate of GMAC CF.

                                   ARTICLE III
                                    RESERVED

                                   ARTICLE IV
                   REPRESENTATIONS, WARRANTIES AND AGREEMENTS

     In order to induce the Agent and the Lenders to enter into this Agreement
and to induce the Lenders to make the Facility available, as of the Closing Date
and each Drawdown Date, each Credit Party hereby represents and warrants to the
Agent and the Lenders (which


                                      -13-



representations and warranties shall survive the execution and delivery of this
Agreement, the Notes and the other Transaction Documents and the drawdown of the
Loans) that:

     Section 4.01 Company Status. Each Credit Party (i) is duly organized and
validly existing in good standing under the laws of the jurisdiction of its
incorporation or formation, (ii) has the organizational power and authority,
together with all governmental, regulatory and/or binding authority approvals,
licenses and permits, to own and operate its property (including, without
limitation, the Vessels) and assets and to transact the business in which it is
engaged and presently proposes to engage and (iii) is duly qualified and is
authorized to do business and is in good standing in each jurisdiction where the
conduct of its business requires such qualifications, except where the failure
to be so qualified is not reasonably expected to result in a Material Adverse
Change.

     Section 4.02 Company Power and Authority. Each Credit Party has the
requisite power and authority to execute, deliver and perform the terms and
provisions of each of the Transaction Documents to which it is party and has
taken all necessary action to authorize the execution, delivery and performance
by it of each of such Transaction Documents. Each Credit Party has duly executed
and delivered each of the Transaction Documents to which it is party, and each
of such Transaction Documents constitutes the legal, valid and binding
obligation of such Credit Party enforceable in accordance with its terms, except
to the extent that such enforceability may be limited by any applicable
bankruptcy, insolvency or similar laws generally affecting the enforcement of
creditor's rights and by general principles of equity.

     Section 4.03 No Violation. Neither the execution, delivery or performance
by any Credit Party of the Transaction Documents to which it is a party, nor
compliance by it with the terms and provisions thereof, (i) will contravene or
violate any provision of any applicable law, statute, rule or regulation or any
applicable order, writ, injunction or decree of any court or governmental
instrumentality, other than any such contravention or violation that could not
reasonably be expected to result in a Material Adverse Change, (ii) will
conflict with or violate or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute (alone or with notice or lapse of
time or both) a default under, or result in the creation or imposition of (or
the obligation to create or impose) any Lien (except pursuant to the Security
Documents) upon any of the material properties or assets of such Credit Party or
any of its Subsidiaries pursuant to the terms of, any indenture, mortgage, deed
of trust, credit agreement or loan agreement, or any other material agreement,
contract or instrument, to which such Credit Party or any of its Subsidiaries is
a party or by which it or any of its property or assets is bound or to which it
may be subject, or (iii) will violate any provision of the certificate of
incorporation or other organizational documents of such Credit Party or any of
its Subsidiaries, any order of any Governmental Authority, or any provision of
any material indenture, agreement or other instrument to which such Credit Party
or any Subsidiary is a party or by which any of them or any of their property is
or may be bound.

     Section 4.04 Governmental Approvals. Except for filings and recordings in
connection with the Security Documents (which filings shall be made on or before
the initial Drawdown Date with respect to the Collateral delivered as of the
initial Drawdown Date) and except as have been obtained and are in effect, no
order, consent, approval, license, authorization or validation of, or filing,
recording or registration with or exemption by, any Governmental Authority, or
any


                                      -14-



subdivision thereof, is required to authorize, or is required in connection
with, (i) the consummation and performance by any Credit Party of any
Transaction Document or (ii) the legality, validity, binding effect or
enforceability of any Transaction Document.

     Section 4.05 Financial Statement; Financial Condition; Undisclosed
Liabilities; etc. Except as otherwise disclosed in writing to the Lenders on or
prior to the date hereof, the financial information regarding such Credit Party
and its Subsidiaries for the year ended December 31, 2004 is complete and
correct, have been prepared in accordance with GAAP and accurately and fairly
present the financial condition of the parties covered thereby as of the
respective dates thereof and the results of the operations thereof for the
period or respective periods covered by such financial statements and since the
date of the most recent of such statements, there has been no Material Adverse
Change and there are no contingent obligations, liabilities for Taxes or other
outstanding financial obligations which are material in the aggregate except as
disclosed in such statements. No written information, exhibit, schedule or
report prepared by or on behalf of such Credit Party and furnished to the Agent
or the Lenders by or at the direction of such Credit Party or any of its
Subsidiaries in connection with the transactions contemplated by this Agreement
or any other Transaction Document, contained any material misstatement of fact
or, when such statement is considered with all other written statements
furnished to the Agent or the Lenders in that connection, omitted to state a
material fact or any fact necessary to make the statement contained herein or
therein not misleading; provided, that, the financial information with respect
to Guarantor's projections, copies of which have been furnished to the Agent and
each Lender prior to the Closing Date or any other relevant date of
determination, were prepared in good faith on the basis of the assumptions
stated therein, which assumptions were believed by the Guarantor to be
reasonable in all material respects at the time made. There is no fact known to
any Credit Party that could reasonably be expected to result in a Material
Adverse Change that has not been expressly disclosed to the Agent and the
Lenders or to the public generally.

     Section 4.06 Litigation. Except as disclosed in Schedule 4.06 hereto, there
is no action, suit, proceeding or investigation (at law or in equity) pending
or, to the best knowledge of each Credit Party, threatened, by or before any
court, administrative agency or other Governmental Authority that might: (i)
adversely affect its ability to perform its obligations under this Agreement or
any other Transaction Document to which it is a party or by which it is bound,
(ii) reasonably be expected to result in any judgment or liability which would
result in a Material Adverse Change or (iii) adversely affect the enforceability
of this Agreement, any Note or any other Transaction Document.

     Section 4.07 No Default. No Credit Party is in (alone or with notice or
lapse of time or both) default (in any respect that could reasonably be expected
to result in a Material Adverse Change) under any agreement by which it or its
property is bound or subject, or is in default in respect of any financial
commitment or obligation.

     Section 4.08 Use of Proceeds; Margin Regulations.

          (a) The proceeds received with respect to the (i) Initial Loans shall
     be used by each Borrower for the sole purpose of general corporate purposes
     and payment of professional fees and expenses of such Borrower and the
     other Credit Parties and (ii) any


                                      -15-



     Additional Loans shall be used to acquire, finance or refinance a Vessel
     and/or for general corporate purposes and payment of professional fees and
     expenses of such Borrower and the other Credit Parties.

          (b) No part of the proceeds of any Loan will be used by any Borrower
     to purchase or carry any Margin Stock or to extend credit to others for the
     purpose of purchasing or carrying any Margin Stock. Neither the making of
     any Loan nor the use of the proceeds thereof will violate or be
     inconsistent with the provisions of Regulation T, U or X of the Board of
     Governors of the Federal Reserve System.

     Section 4.09 Tax Returns and Payments. Each Borrower and each of its
Subsidiaries has filed or caused to be filed, with the appropriate taxing
authority, all federal, state, provincial and other returns, statements, forms
and reports for Taxes (the "Returns") required to be filed by or with respect to
the income, properties or operations of such Borrower and/or its Subsidiaries
except where the failure to so file or cause to be filed could not reasonably be
expected to result in a Material Adverse Change. The Guarantor, the Borrowers
and their respective Subsidiaries have paid all Taxes payable by them other than
(a) Taxes which are not delinquent and (b) Taxes contested in good faith by
appropriate proceedings and for which adequate reserves have been established in
accordance with GAAP and (c) Taxes payable to jurisdictions other than the
United States, Panama, the Philippines and the Marshall Islands as to which the
failure to pay such Taxes could not reasonably be expected to result in a
Material Adverse Change.

     Section 4.10 Compliance with ERISA.

          (a) Except, in each case, as could not reasonably be expected to
     result in a Material Adverse Change or except as disclosed on Schedule 4.10
     hereto, (i) each Plan (if any) (and each related trust, insurance contract
     or fund) is in compliance in all material respects with its terms and with
     all applicable laws, including without limitation ERISA and the Code; (ii)
     each Plan (if any) (and each related trust, if any) which is intended to be
     qualified under Section 401(a) of the Code has received a determination
     letter from the Internal Revenue Service to the effect that it is qualified
     and meets the requirements of Sections 401 (a) and 501 (a) of the Code and
     nothing has occurred since the date of such determination letter that could
     adversely affect the qualification of such Plan (if any); (iii) the most
     recent annual report (Form 5500 Series) with respect to each Plan (if any),
     including Schedule B (Actuarial Information) thereto, copies of which have
     been filed with the Internal Revenue Service, is complete and correct and
     fairly presents the funding status of each such Plan (if any), and since
     the date of such report there has been no Material Adverse Change in such
     funding status; (iv) no Reportable Event has occurred or is reasonably
     likely to occur; (v) no Plan (if any) which is a multiemployer plan (as
     defined in Section 4001(a)(3) of ERISA) is insolvent or in reorganization;
     (vi) no Plan (if any) which is subject to Section 412 of the Code or
     Section 302 of ERISA has an accumulated funding deficiency, within the
     meaning of such sections of the Code or ERISA, or has applied for or
     received a waiver of a funding deficiency or an extension of any
     amortization period, within the meaning of Section 412 of the Code or
     Section 303 or 304 of ERISA; (vii) all contributions required to be made
     with respect to a Plan (if any) have been or will be timely made; (viii)
     neither any Borrower nor any Subsidiary of such Borrower nor any ERISA
     Affiliate has committed any violation or incurred any liability


                                      -16-



     (including any indirect, contingent or secondary liability) pursuant to
     Section 406, 409, 502(i), 502(1), 515 or Title IV of ERISA (other than the
     payment of premiums, none of which are overdue) or Section 401(a)(29), 4971
     or 4975 of the Code or reasonably expects to incur any such liability under
     any of the foregoing sections; (ix) no condition exists which presents a
     risk to any Borrower or any Subsidiary of such Borrower or any ERISA
     Affiliate of incurring a liability to or on account of a Plan (if any)
     pursuant to the foregoing provisions of ERISA and the Code; (x) no
     proceedings have been instituted to terminate or appoint a trustee to
     administer any Plan (if any) which is subject to Title IV of ERISA; (xi)
     neither any Borrower, the Guarantor nor any ERISA Affiliate has incurred
     any liability (which remains unpaid) under the Worker Adjustment and
     Retraining Notification Act (29 U.S.C. Sections 201-2109); (xii) no action,
     suit, proceeding, hearing, audit or investigation with respect to the
     administration, operation or the investment of assets of any Plan (if any)
     (other than routine claims for benefits) is pending, expected or
     threatened; (xiii) none of the Borrowers has received notice that indicates
     the existence of potential withdrawal liability under a Multiemployer Plan
     (if any) (as defined In Section 4001(a)(3) of ERISA); (xiv) each group
     health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2)
     of the Code) which covers or has covered employees or former employees of
     any Borrower, any Subsidiary of such Borrower, or any ERISA Affiliate has
     at all times been operated in compliance with the provisions of Part 6 of
     subtitle B of Title I of ERISA and Section 4980B of the Code; (xv) no lien
     or security interest encumbrance on the assets of such Borrower or any
     Subsidiary of such Borrower or any ERISA Affiliate that is imposed under
     the Code or ERISA or is likely to arise in connection with any Plan (if
     any); (xvi) no Borrower and its Subsidiaries maintains or contributes to
     any employee welfare benefit plan (as defined in Section 3(1) of ERISA)
     which provides benefits to retired employees or other former employees
     (other than as required by Section 601 of ERISA) or any Plan (if any);
     (xvii) no Plan (if any) has an Unfunded Current Liability in excess of
     $500,000; (xviii) the accumulated post retirement benefit obligation (as
     determined in accordance with Financial Accounting Standard 106 of any
     Borrower, the Guarantor and any ERISA Affiliate, to the extent it could
     subject such Borrower or the Guarantor to liability, shall not as of the
     end of the fiscal year preceding the Closing Date exceed $500,000, and
     there is no other post-termination benefit obligation for which any
     Borrower could reasonably be expected to incur liability or be obligated in
     excess of $500,000, and no Borrower shall take any action not required by
     applicable law that could reasonably be expected to cause such obligation
     to increase above $500,000; (xix) engage in any transaction which would
     cause any obligation, or action taken or to be taken, hereunder (or the
     exercise by the Agent or the Lender of any of its rights under this
     Agreement or the other Loan Documents) to be a non-exempt (under a
     statutory or administrative class exemption) prohibited transaction under
     ERISA or result in a violation of a state statute regulating governmental
     plans that would subject the Agent or Lender to liability for a violation
     of ERISA or such a state statute; and (xx) using actuarial assumptions and
     computation methods consistent with Part 1 of Subtitle E of Title IV of
     ERISA, the aggregate liabilities of the Borrowers, their Subsidiaries, the
     Guarantor and their ERISA Affiliates to all Plan (if any)s which are
     multiemployer plans (as defined in Section 4001 (a)(3) of ERISA) in the
     event of a complete withdrawal therefrom, as of the close of the most


                                      -17-



     recent fiscal year of such Plan (if any) ended prior to the date of the
     most recent making of a Loan, would not exceed $500,000.

          (b) Except, in each case, as could not reasonably be expected to
     result in a Material Adverse Change, (i) each Foreign Pension Plan (if any)
     has been maintained in compliance in all material respects with its terms
     and with the requirements of any and all applicable laws, statutes, rules,
     regulations and orders and has been maintained, where required, in good
     standing with applicable regulatory authorities; (ii) all contributions
     required to be made with respect to a Foreign Pension Plan (if any) have
     been timely made; (iii) none of the Guarantor, any Borrower nor any of
     their respective Subsidiaries has incurred any obligation in connection
     with the termination of or withdrawal from any Foreign Pension Plan (if
     any); and (iv) the present value of the accrued benefit liabilities
     (whether or not vested) under each Foreign Pension Plan (if any),
     determined as of the end of each Borrower's most recently ended fiscal year
     on the basis of actuarial assumptions, each of which is reasonable, did not
     exceed the current value of the assets of such Foreign Pension Plan (if
     any) allocable to such benefit liabilities.

          (c) As of the Closing Date and throughout the term of the Loan,
     Borrower and Guarantor are not and will not be an "employee benefit plan"
     as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA,
     and none of the assets of Borrower or Guarantor will constitute "plan
     assets" of one or more such plans for purposes of Title I of ERISA. As of
     the Closing Date and throughout the term of the Loan, Borrower and
     Guarantor are not and will not be a "governmental plan" within the meaning
     of Section 3(3) of ERISA and Borrower and Guarantor will not be subject to
     state statutes regulating investments and fiduciary obligations with
     respect to governmental plans.

     Section 4.11 Ownership; Subsidiaries. Schedule 4.11 (as revised by any
supplement hereto) correctly (a) lists each of the Guarantor's and each
Borrower's direct and indirect Subsidiaries as of the Closing Date or, pursuant
to a supplement to Schedule 4.11, as of the applicable Drawdown Date and (b)
describes the Equity Interests owned by the Guarantor, Westbrook and each
Borrower (directly or indirectly) in each of its Subsidiaries as of the Closing
Date or, pursuant to a supplement to Schedule 4.11, as of the applicable
Drawdown Date.

     Section 4.12 Compliance with Laws.

          (a) The Guarantor and each Borrower and each of its Subsidiaries is in
     compliance with all applicable statutes, regulations, rules and laws, and
     any judgment, writ, injunctions, decrees or order of, and all applicable
     restrictions imposed by, all Governmental Authorities, in respect of the
     conduct of its businesses and the ownership of its property, except such
     noncompliances as could not (in the event such noncompliance were asserted
     by any Person through appropriate action), individually or in the
     aggregate, reasonably be expected to result in a Material Adverse Change.

          (b) Each Credit Party has operated each Vessel in compliance with (a)
     any applicable registration and bonding requirements relating to such
     Vessel; (b) any applicable law, regulation or order by any governmental
     entity having jurisdiction over such Credit Party or over the Vessel or
     vessel operations; and (c) any applicable


                                      -18-



     Executive Order of the President of the United States and any applicable
     U.S. federal, state or local law, statute or regulation, including but not
     limited to regulations issued and/or enforced by the Federal Maritime
     Commission, regulations issued and/or enforced by the U.S. Coast Guard,
     regulations issued and/or enforced by the Office of Foreign Assets Control
     of the U.S. Department of the Treasury, regulations issued and/or enforced
     by the U.S. Department of State, regulations issued by and/or enforced by
     the U.S. Department of Commerce, and regulations issued and/or enforced by
     the U.S. Homeland Security Department (including the Bureau of Customs and
     Border Protection and the Transportation Security Administration) (all such
     aforementioned Executive Orders, laws, statutes and regulations contained
     in this Section 4.12(b) being "Applicable U.S. Laws"), except that such
     Credit Party shall not be in default hereunder if there have been
     unintentional minor or nonrecurring violations which are cured promptly and
     which: (i) do not involve any loss or reduction of coverage under any
     insurance required by this Agreement; (ii) do not involve any significant
     risk of the sale, forfeiture or loss of or damage to any Vessel or any
     interest therein; (iii) do not subject the Agent or any Lender to civil
     penalties; (iv) do not subject such Credit Party or the Agent or any Lender
     to criminal penalties; and (v) do not subject such Credit Party operating
     any Vessel, or the Agent or any Lender to any fine, penalty or enforcement
     action which would materially adversely affect the business or operations
     of such Credit Party, the operation of any Vessel or the rights of such
     Credit Party or the Agent or any Lender hereunder, provided that, in any
     case, such Credit Party may in good faith diligently contest the validity
     or application of such applicable law, statute or regulation in any
     reasonable manner which does not materially adversely affect the Agent or
     any Lender or have any significant risk of the sale or forfeiture of any
     Vessel or materially affect the rights of the Agent or any Lender or the
     Obligations of such Credit Party hereunder.

     Section 4.13 Investment Company Act; Public Utility Holding Company Act.
Neither the Guarantor nor any Borrower nor any of their respective Subsidiaries
is either (x) an "investment company" or a company controlled by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or (y) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935, as amended.

     Section 4.14 Environmental Matters.

          (a) (i) Except as disclosed in Schedule 4.14, the Guarantor and each
     Borrower and each of their respective Subsidiaries have complied with, and
     on the date of each advance of a Loan will be in compliance with, all
     applicable Environmental Laws and the requirements of any permits issued
     under such Environmental Laws; (ii) there are no pending or threatened
     Environmental Claims against the Guarantor or any Borrower or any of their
     respective Subsidiaries or any property owned or operated by the Guarantor,
     any Borrower or any of their respective Subsidiaries having a fair market
     value in excess of One Hundred Fifty Thousand Dollars ($150,000); (iii)
     there are no facts, circumstances, conditions or occurrences with respect
     to the business or operations of a Borrower, the Guarantor or any of their
     respective Subsidiaries, or any property at any time owned or operated by a
     Borrower, the Guarantor or any of their respective Subsidiaries, that could
     reasonably be expected to form the basis of an Environmental


                                      -19-



     Claim against the Guarantor, any Borrower or any of their respective
     Subsidiaries or any such property in excess of One Hundred Fifty Thousand
     Dollars ($150,000), or to cause any such currently owned property to be
     subject to any restrictions on the ownership, occupancy, use or
     transferability of such property by the Guarantor, a Borrower or any of
     their respective Subsidiaries under any applicable Environmental Law.

          (b) (i) Except as disclosed in Schedule 4.14, Hazardous Materials have
     not at any time been generated, used, treated or stored on, or transported
     to or from, any Real Property owned or operated by the Guarantor, a
     Borrower or any of their respective Subsidiaries where such generation,
     use, treatment or storage has violated or could reasonably be expected to
     violate any Environmental Law in such a manner so as to cause this
     representation to be untrue, and (ii) Hazardous Materials have not at any
     time been Released on or from any property owned or operated by the
     Guarantor, any Borrower or any of their respective Subsidiaries where such
     Release has violated or could reasonably be expected to violate any
     applicable Environmental Law in such a manner so as to cause this
     representation to be untrue.

     Section 4.15 Labor Relations. (a) Except as could not reasonably be
expected to result in a Material Adverse Change, none of the Guarantor or any
Borrower nor any of its Subsidiaries is engaged in any unfair labor practice;
(b) except (in each case) as could not reasonably be expected to result in a
Material Adverse Change, there is (i) no unfair labor practice complaint pending
against the Guarantor or any Borrower or any of its Subsidiaries, or, to the
knowledge of the Guarantor or any Borrower, threatened against any of them,
before the National Labor Relations Board, and no material grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against the Guarantor or any Borrower or any of its
Subsidiaries or threatened against any of them, (ii) no strike, labor dispute,
slowdown or stoppage pending against the Guarantor or any Borrower or any of its
Subsidiaries or threatened against the Guarantor or any Borrower or any of its
Subsidiaries and (iii) no union representation proceeding pending with respect
to the employees of the Guarantor or any Borrower or any of its Subsidiaries;
and (c) except (in each case) as could not reasonably be expected to result in a
Material Adverse Change, hours worked by and payments made to any employee of
any Borrower, the Guarantor or any ERISA Affiliate have not been in violation of
the Fair Labor Standards Act, as amended, or any other applicable law dealing
with such matters.

     Section 4.16 Patents, Licenses, Franchises and Formulas. The Guarantor and
each Borrower and each of its Subsidiaries owns or is licensed to use all
material patents, trademarks, permits, service marks, trade names, copyrights,
licenses, franchises and formulas, or rights with respect to the foregoing, and
has obtained assignments of all material leases and other rights of whatever
nature, reasonably necessary for the present conduct of its business and
operations, without any known conflict with the rights of others which, or the
failure to obtain or so own which, as the case may be, has had, or could
reasonably be expected to result in, a Material Adverse Change.

     Section 4.17 Security Interests. Immediately prior to each Loan hereunder,
the relevant Credit Party shall have good and marketable title to its respective
Vessel, free and clear of any Lien (other than Permitted Encumbrances). On the
applicable Loan Date, each Vessel that is to be pledged to the Agent under a
Mortgage is, or shall be at the time of such pledge, an Eligible


                                      -20-



Vessel. On and after the Closing Date and each Drawdown Date, each of the
Security Documents creates (or after the execution and delivery thereof, will
create), as security for the Obligations purported to be secured thereby, a
valid and enforceable security interest in and Lien on all of the Collateral
subject thereto, which security interest shall be perfected upon the taking of
possession thereof, completion of filings with respect thereto or such other
method of perfection as permitted by applicable law, in each case as required by
this Agreement or the other Transaction Documents, superior to and prior to the
rights of all third Persons and subject to no other Liens (except for Permitted
Encumbrances with respect to the Vessels. No filings or recordings are required
in order to perfect the security interests created under any Security Document
except for filings or recordings required in connection with any such Security
Document which shall have been made on or before the related Drawdown Date.

     Section 4.18 Indebtedness. Schedule 4.18 sets forth a true and complete
list of all (i) Indebtedness for borrowed money of the Guarantor and each
Borrower and each of their respective Subsidiaries that is outstanding as of the
Closing Date, or pursuant to a supplement to Schedule 4.18, as of the applicable
Drawdown Date and (ii) agreements existing on the Closing Date, or pursuant to a
supplement to Schedule 4.18, as of the applicable Drawdown Date pursuant to
which the Guarantor and each Borrower or any of their respective Subsidiaries
are entitled to incur Indebtedness, in each case showing the aggregate principal
amount thereof, the name of the borrower thereunder and any other entity which
directly or indirectly guaranteed or is a co-obligor of such debt.

     Section 4.19 Solvency. The Guarantor, Technotrade, Westbrook and each
Borrower, at the time of and after giving effect to each Loan hereunder, is
Solvent on and as of the date thereof. Neither as a result of the transactions
contemplated by this Agreement or the other Transaction Documents nor otherwise
does any such Credit Party believe that it will incur debts beyond its ability
to pay or which would be prohibited by its charter documents or by-laws. The
assets and cash flow of the Guarantor and each Borrower enable it to meet its
present obligations in the ordinary course of business as they become due. The
transactions contemplated by this Agreement and the other Transaction Documents
are being consummated by the Credit Parties in good faith and in furtherance of
their ordinary business purposes and constitute a practical and reasonable
course of action by them designed to improve their financial position, with no
contemplation of insolvency and with no intent to hinder, delay or defraud any
present or future creditors.

     Section 4.20 Concerning the Vessels. The name, official number, registered
owner, classification and jurisdiction of registration of each Vessel is set
forth on Schedule 4.20 hereto (as revised by any supplement hereto). Each Vessel
is operated in material compliance with all applicable maritime rules and
regulations, including, without limitation, with respect to each Vessel operated
in the coastwise trade of the United States, the Shipping Act of 1916, as
amended and in effect, and the regulations promulgated thereunder. Each Vessel
is maintained and operated in material compliance with all applicable
Environmental Laws. Each Vessel is operationally seaworthy and in every way fit
for its intended service. No Vessel has suffered a Total Loss. Each Vessel
conforms to the description thereof set forth on Schedule I to the related
Mortgage. Subject to the proviso set forth in Section 7.11 hereof, no Vessel is
maintained, insured, located, operated or used (directly or indirectly) in
violation of any United States


                                      -21-



statutes, rules or regulations, in a Prohibited Jurisdiction or by a Prohibited
Person, and no lessee or sublessee is a Prohibited Person or organized under the
laws of a Prohibited Jurisdiction.

     Section 4.21 Citizenship. Each Borrower owns or is qualified to own its
Vessel under the laws of an Approved Jurisdiction. Each Borrower, Viking,
Overseas Bulk and each other Person which may operate one or more of the Vessels
is qualified to operate such Vessels under the laws of an Approved Jurisdiction
and each other Jurisdiction where any such Vessel may be operated.

     Section 4.22 Vessel Classification. Each Vessel is classified in the
highest classification and rating for vessels of the same age and type with the
respective classification society set forth in Schedule 4.20, without, except as
set forth in Schedule 4.22, any conditions or recommendations affecting class.

     Section 4.23 No Material Adverse Change. There has been no event giving
rise to a Material Adverse Change in the business, assets, operations or
financial condition of any of the Credit Parties or any of their Subsidiaries
(taken as a whole) since December 31, 2004.

     Section 4.24 Insurance. Each of the Credit Parties has insured its
properties and assets as set forth in the Mortgage. Each such insurance policy
is in full force and effect and covers all of the Vessels owned by the Credit
Parties. All premiums in respect of such insurance policies have been paid. Each
of the Agent and the Lenders is named as additional insureds on such insurance
policies. Each charter of a Vessel requires the lessee or sublessee thereunder
to either maintain insurance covering damage to, destruction or theft of the
Vessel subject thereto in an amount at least equal to the Insured Value
therefor.

     Section 4.25 Principal Place of Business and Chief Executive Office. The
principal place of business and chief executive office of Credit Party is
located at the address set forth in Schedule 4.25 hereof, and has been located
in the same state for at least four months prior to the date of execution and
delivery of this Agreement.

     Section 4.26 Legal Name. The legal name of each Credit Party is as set
forth in this Agreement and no Credit Party has changed its name in the last six
years and does not have any trade names, fictitious names, assumed names or
"doing business as" names.

     Section 4.27 Representations and Warranties True and Correct. Each of the
representations and warranties made by each Credit Party under each of the other
Transaction Documents to which it is a party or by which it is bound is true and
correct in all material respects when and as made or remade. All representations
and warranties made by each Credit Party in any certificate or other document
delivered at the closing of the transactions contemplated by the applicable
Transaction Document are true and correct in all material respects.

     Section 4.28 Foreign Assets Control Regulations, etc.

          (a) Subject to the proviso set forth in Section 7.11 hereof, none of
     the requesting or borrowing of any Loan or the use of the proceeds of such
     will violate the Trading With the Enemy Act (50 U.S.C Section 1 et seq., as
     amended) (the "Trading With the


                                      -22-



     Enemy Act") or any of the foreign assets control regulations of the United
     States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) (the
     "Foreign Assets Control Regulations") or any enabling legislation or
     executive order relating thereto (which for the avoidance of doubt shall
     include, but shall not be limited to (i) Executive Order 13224 of September
     21, 2001 Blocking Property and Prohibiting Transactions With Persons Who
     Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
     (2001)) (the "Executive Order") and (ii) the Uniting and Strengthening
     America by Providing Appropriate Tools Required to Intercept and Obstruct
     Terrorism Act of 2001 (Public Law 107-56)). Furthermore, subject to the
     proviso set forth in Section 7.11 hereof, none of the Credit Parties or
     their Affiliates (i) is or will become a "blocked person" as described in
     the Executive Order, the Trading With the Enemy Act or the Foreign Assets
     Control Regulations or (ii) engages or will engage in any dealings or
     transactions, or be otherwise associated, with any such "blocked person".

          (b) Each Credit Party warrants and represents that neither it nor any
     of its members, directors, officers, employees, parents, Subsidiaries or
     Affiliates are: (1) subject to U.S. or multilateral economic or trade
     sanctions currently in force; (2) owned or controlled by, or act on behalf
     of, any governments, corporations, entities or individuals that are subject
     to U.S. or multilateral economic or trade sanctions currently in force; (3)
     are named identified or described on any blocked persons list, designated
     nationals list, denied persons list, entity list, debarred party list,
     unverified list, sanctions list or other list of individuals or entities
     with whom U.S. persons may not conduct business, including but not limited
     to lists published or maintained by the Office of Foreign Assets Control of
     the U.S. Department of Treasury, lists published or maintained by the U.S.
     Department of Commerce, and lists published or maintained by the U.S.
     Department of State.

                                    ARTICLE V
                              CONDITIONS OF LENDING

     Section 5.01 Conditions Precedent to Drawdown of any Loan. The obligation
of the Lenders to make a Loan available to any Borrower under this Agreement
shall be expressly subject to the following conditions precedent:

          (a) The Agent shall have received the following documents in form and
     substance satisfactory to the Agent and its legal advisor:

          (i)  copies, certified as true and complete by an officer of such
               Borrower and the Guarantor, of the resolutions of such Borrower
               and the Guarantor evidencing approval of this Agreement, the
               Notes and the other Transaction Documents to which it is a party
               and authorizing an appropriate officer or officers or
               attorney-in-fact or attorneys-in-fact to execute the same on its
               behalf, or other evidence of such approvals and authorizations;

          (ii) copies, certified as true and complete by an officer of such
               Borrower and the Guarantor, of all documents evidencing any other
               necessary action


                                      -23-



               (including actions by such parties thereto other than the Credit
               Parties as may be required by the Agent), approvals or consents
               with respect to the Transaction Documents;

          (iii) copies, certified as true and complete by an officer of such
               Borrower and the Guarantor, of the certificate of incorporation
               and bylaws or the certificate of formation and operating
               agreement (or equivalent instruments) thereof;

          (iv) certificate of the Secretary of the Guarantor certifying that it
               legally and beneficially owns, directly all of the issued and
               outstanding Equity Interests of Technotrade, that Technotrade
               legally and beneficially owns, directly all of the issued and
               outstanding Equity Interests of Westbrook and that Westbrook
               legally and beneficially owns directly all of the issued and
               outstanding Equity Interests of such Borrower, and that such
               Equity Interests are free and clear of any liens, claims, pledges
               or other encumbrances whatsoever;

          (v)  certificate of the Secretary of such Borrower, certifying as to
               the record ownership of all of its issued and outstanding Equity
               Interests;

          (vi) certificates of the jurisdiction of formation of such Borrower
               and the Guarantor as to the good standing thereof;

          (vii) license from the United States Department of Commerce Bureau of
               Industry and Security permitting TBS North America Liner, Ltd. to
               locate, operate and/or use (directly or indirectly) in Cuba any
               Vessel; and

          (viii) each pooling agreement to which such Borrower is a party or the
               applicable Vessel is subject, and each management agreement or
               technical agreement between the Guarantor and another Person that
               affects or relates to, or may affect or relate to, the applicable
               Vessel, and each charter between PacRim and another Person that
               affects or relates to, or may affect or relate to, such Vessel.

          (b) The Agent shall have received evidence satisfactory to the Agent
     and its legal advisor that:

          (i)  the applicable Vessel (except as disclosed in schedule 4.20) is
               in the sole and absolute ownership of the relevant Borrower as
               set forth in Schedule 4.20 and duly registered in such Borrower's
               name under the flag of an Approved Jurisdiction, unencumbered,
               save and except for the Mortgage recorded against it and
               Permitted Encumbrances;

          (ii) the Mortgage on the applicable Vessel has been properly filed and
               recorded under the laws of Panama and constitutes a first
               priority naval preferred ship mortgage effective against third
               parties, subject only to Permitted Encumbrances, the Filipino
               Bareboat Charter has been properly


                                      -24-



          recorded under the laws of the Philippines and each Approved
          Jurisdiction has consented to the dual-flagging of the applicable
          Vessel in the Philippines;

     (iii) except as otherwise disclosed to the Agent in writing, the applicable
          Vessel is classed in the highest classification and rating for vessels
          of the same age and type with the respective classification society as
          set forth in Schedule 4.20 without any outstanding conditions or
          recommendations affecting class except as set forth in Schedule 4.22;

     (iv) each Person that may have a Lien on the applicable Vessel has
          subordinated its Lien to the Lien of the Agent;

     (v)  all necessary governmental or regulatory approvals, licenses and
          authorities which are necessary to the operation of the applicable
          Vessel have been obtained from each applicable Governmental Authority;

     (vi) the applicable Vessel is insured in accordance with the provisions of
          the related Mortgage and the requirements thereof in respect of such
          insurances have been complied with;

     (vii) with respect to the Tuckahoe and each Additional Loan made in respect
          of a Vessel, evidence of the actual purchase price of such Vessel;

     (viii) an appraisal (which shall not be a desktop appraisal) of the
          applicable Vessel, by a marine surveyor designated by the Agent, as to
          the Fair Market Value of such vessel as of a date not more than ninety
          days prior to such Drawdown Date;

     (ix) (1) with respect to the Tuckahoe, a legal, valid, binding and
          enforceable Filipino Bareboat Charter between Henley and Viking,
          Memorandum of Three Party Agreement by and among Viking, Henley and
          PacRim and an assignment of such Filipino Bareboat Charter, such
          Memorandum of Three Party Agreement and any other charter in respect
          of the Tuckahoe, (2) with respect to the Mohegan, a legal, valid,
          binding and enforceable Filipino Bareboat Charter between Vernon and
          Overseas Bulk, Memorandum of Three Party Agreement by and among
          Overseas Bulk, Vernon and PacRim and an assignment of such Filipino
          Bareboat Charter, such Memorandum of Three Party Agreement and any
          other charter in respect of the Mohegan, (3) with respect to the
          Tayrona, a legal, valid, binding and enforceable Filipino Bareboat
          Charter between Arden and Overseas Bulk, Memorandum of Three Party
          Agreement by and among Overseas Bulk, Arden and PacRim and an
          assignment of such Filipino Bareboat Charter, such Memorandum of Three
          Party Agreement and any other charter in respect of the Tayrona, and
          (4) with respect to the Taino, a legal, valid, binding and enforceable
          Filipino Bareboat Charter between Oldcastle and Overseas Bulk,
          Memorandum of Three Party Agreement by


                                      -25-



          and among Viking, Oldcastle and PacRim and an assignment of such
          Filipino Bareboat Charter, such Memorandum of Three Party Agreement
          and any other charter in respect of the Taino;

     (x)  an acknowledged Notice (as defined in the Assignment of Earnings and
          Insurances) from Viking and Overseas Bulk;

     (xi) a Safety Management Certificate and Document of Compliance pursuant to
          Section 6.20(b);

     (xii) with respect to the applicable Vessel, a certified copy of the
          legalized or apostilled Bill of Sale and Acceptance therefor and the
          Provisional Patente therefor.

     (c) The applicable Borrower shall have duly executed and delivered this
Agreement, the Notes and the other Transaction Documents to which it is a Party;
the Guarantor shall have duly executed and delivered this Agreement, the
Security Documents and the other Transaction Documents to which it is a party;
Westbrook will have executed the Pledge Agreement and each other Transaction
Document to which it is a party; and the Liners, PacRim, Transworld Cargo
Carriers S.A., TBS Shipping Services Inc., Technotrade Limited, RAS Shipping
Company Limited, TBS Worldwide Services, Inc., TBS Logistics Ltd., TBS
International Limited (as successor by merger to TBS Shipping International
Limited) and Roymar Ship Management, Inc. shall have executed and delivered the
Assignment of Earnings and Insurances.

     (d) Westbrook shall have delivered certificates representing the Equity
Interests subject to the Pledge Agreement to the Agent, together with executed
and undated stock powers with respect thereto, and all other documents required
to be delivered pursuant to the Pledge Agreement.

     (e) The applicable Borrower shall each have duly executed and delivered the
following documents:

     (i)  the Mortgage with respect to its Vessel(s);

     (ii) an Assignment of Earnings and Insurances and an Assignment of Charter
          with respect to its Vessel(s);

     (iii) Uniform Commercial Code Financing Statements for filing with the
          appropriate jurisdictions necessary to perfect the security interest
          of the Agent for the benefit of the Lenders in and to its Collateral;
          and

     (iv) such other documents as may be required to perfect the security
          interest of the Agent, on behalf of the Lenders, in the Collateral in
          such jurisdictions as may be appropriate.

     (f) The Agent shall have received a certificate from the President of such
Borrower and the Guarantor (or, pursuant to evidence of authority in form and
substance


                                      -26-



satisfactory to the Agent, the Chief Financial Officer of TBS Shipping Services
Inc.) to the effect that such Borrower and the Guarantor are in compliance with
the conditions precedent set forth in this Article V, that the representations
and warranties of such Borrower and the Guarantor are true and correct in all
material respects on and as of the date of such Loan as though made on and as of
such date (except in the case of any representation or warranty that expressly
speaks as to an earlier date), no event has occurred or will occur as a result
of the making of such Loan that constitutes or will constitute a Default or an
Event of Default and the aggregate principal amount of all outstanding Loans
(after giving effect to the making of such Loan) will not exceed the Aggregate
Loan Commitment.

     (g) The Agent shall have received evidence that no Credit Party or any of
its Subsidiaries is subject to any Environmental Claim which could reasonably be
expected to result in a Material Adverse Change.

     (h) The Agent shall have received payment in full of all fees and expenses
due on or before the Closing Date to the Agents and the Lenders, or such fees
and expenses shall be paid directly from the Initial Loan proceeds on the
Closing Date.

     (i) The Agent shall have received evidence satisfactory to the Agent and to
its legal advisor that, save for the liens created by the Mortgages and the
Assignments of Earnings and Insurances, there are no liens, charges or
encumbrances of any kind whatsoever on any of the Vessels or on their respective
earnings except for Permitted Encumbrances and, with respect to the other
Collateral, there are no liens, charges or encumbrances of any kind whatsoever.

     (j) The Agent and the Lenders shall have received the favorable written
opinions of New York counsel and Bermuda counsel to the Borrowers, Westbrook and
the Guarantor dated the Closing Date and in form and substance satisfactory to
the Agent and its legal advisors regarding certain corporate matters,
enforceability, perfection and priority of security interests, and other matters
as are customary for transactions to those described in the Transaction
Documents.

     (k) The Agent and the Lenders shall have received a favorable written
opinion of Panamanian counsel to the Borrowers, dated the Closing Date and in
form and substance satisfactory to the Agent and its legal advisors regarding
perfection and priority of the mortgage and security interest of the Agent in
the Vessels and certain corporate matters and enforceability of those
Transaction Documents governed by the laws of Panama.

     (l) The applicable Borrower shall have successfully acquired and possess
good and marketable title to the applicable Vessel (subject to Permitted
Encumbrances).

     (m) There shall have occurred no event that could result in a Material
Adverse Change, or prospect of material change in any Credit Party's structure,
ownership, financial condition or operating trends since the Closing Date.


                                      -27-



          (n) The Agent shall have received any additional opinions, documents,
     appraisals, affidavits and/or certificates of one or more of the Borrowers,
     Westbrook, the Guarantor or any other Person as it may reasonably require.

     Section 5.02 Further Conditions Precedent. The obligation of the Lenders to
make any Loan available to the Borrowers under this Agreement shall be expressly
and separately subject to the following further conditions precedent on the
relevant Drawdown Date:

          (a) The Agent shall have received a Drawdown Request in accordance
     with the terms of Section 2.01 or Section 2.02, as the case may be.

          (b) The representations and warranties set forth in Article IV hereof
     shall be true and correct in all material respects with the same effect as
     though each such representation and warranty had been made on and as of
     such date, except to the extent that any of such representations and
     warranties expressly relate to earlier dates, or are no longer true as a
     result of transactions not prohibited by the Transaction Documents.

          (c) No Default or Event of Default shall have occurred and be
     continuing.

          (d) No change in any applicable laws, regulations, rules or in the
     interpretation thereof shall have occurred which make it unlawful for any
     Credit Party to make any payment as required under the terms of the
     Transaction Documents.

                                   ARTICLE VI
                              AFFIRMATIVE COVENANTS

     Each Credit Party covenants and agrees that, so long as this Agreement
shall remain in effect or any of the Obligations shall be outstanding, it shall,
and the Guarantor shall cause Technotrade to cause Westbrook and each of the
Borrowers to (unless the Guarantor shall have received the prior written consent
of the Requisite Lenders):

     Section 6.01 Existence. (a) Do or cause to be done all things necessary to
preserve and keep in full force and effect its existence (except as permitted by
Section 7.16), rights and franchises as a company under the laws of its place of
organization, (b) do or cause to be done all things necessary to preserve and
keep in full force and effect all of its licenses, permits and governmental
approvals necessary for the normal conduct of its business, (c) comply with all
laws applicable to it and at all times be qualified to do business in the
jurisdictions where failure to qualify could reasonably be expected to result in
a Material Adverse Change or is necessary to protect the validity and
enforceability of the rights of the Agent and the Lenders under the Transaction
Documents, and (d) comply with the provisions of its organizational documents
and all applicable laws except to the extent that the failure to comply with
such applicable laws would not result in a Material Adverse Change.

     Section 6.02 Payment of Debts. Duly and punctually pay the interest on and
principal of the Loans in accordance with this Agreement. Pay its debts,
liabilities and obligations when due, except (a) other than the Obligations, any
such debts, liabilities and obligations that are being contested in good faith
by appropriate proceedings, (b) other than the Obligations, any single debt,
liability or obligation, which does not exceed $1,000,000 and (c) other than the


                                      -28-



Obligations, any debts, liabilities and obligations, which in the aggregate do
not exceed $1,000,000.

     Section 6.03 Accounts and Records. Keep and maintain full and accurate
accounts and records in accordance with GAAP consistently applied.

     Section 6.04 Payment of Taxes and Claims. Prepare and timely file all tax
returns required to be filed by it and pay and discharge all Taxes and other
governmental claims imposed upon it or in respect of any of its property and
assets before the same shall become in default, as well as all lawful claims
(including, without limitation, claims for labor, materials and supplies) which,
if unpaid, might become a lien or charge upon the Collateral or any part
thereof, except (a) in each case, for any such Taxes as are being contested in
good faith by appropriate proceedings and for which adequate reserves have been
made in accordance with GAAP or (b) with respect to foreign Taxes, the failure
of which to pay or discharge could not reasonably be expected to result in a
Material Adverse Change. The Credit Parties shall notify the Agent of any
material challenge, contest or proceeding pending by or against any of them.

     Section 6.05 Financing Statements. In the case of the Collateral, execute,
financing statements or other documents deemed necessary or desirable by the
Agent to create, attach and/or perfect, maintain or preserve the creation,
attachment and/or priority of, any mortgage lien or other security interest
granted (or purported to be granted) pursuant to the Transaction Documents and
pay the filing costs thereof. Without limiting the generality of the foregoing,
each of the Credit Parties will execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or notices, as may
be reasonably necessary or desirable, or that the Agent may reasonably request,
to protect and preserve the Liens granted or purported to be granted hereby and
by the other Transaction Documents and/or to enable the Agent to exercise and
enforce its rights and remedies hereunder or under the other Transaction
Documents with respect to any of the Collateral. Each of the Credit Parties
hereby authorizes the Agent to file, and hereby ratifies any filing made prior
to the Closing Date of, one or more financing or continuation statements, and
amendments thereto, relative to all or any part of the Collateral without the
signature of such Credit Party, where permitted by law.

     Section 6.06 Compliance with Law.

          (a) Comply in all material respects with all applicable federal,
     state, local and foreign laws, ordinances, rules, orders and regulations
     now in force or hereafter enacted, including, without limitation all laws
     and regulations relating to environmental laws and employee benefit plans,
     failure to comply with which could reasonably be expected to result in a
     Material Adverse Change.

          (b) Acknowledge hereby that transportation to, from, or within the
     United States is subject to the laws and regulations of the United States,
     and such Credit Party covenants and agrees that neither it nor any of its
     agents, representative or affiliates shall use, operate, lease, sublease,
     maintain, or insure any Vessel for any purpose or in any manner which
     violates directly or indirectly any Applicable U.S. Laws.


                                      -29-



          (c) Comply with all information requests from the Agent or any Lender
     and from any court, agency, office, department or other instrumentality of
     any U.S. federal, state or local government regarding Agent's, any Lender's
     or any Credit Party's compliance with the Applicable U.S. Laws.

     Section 6.07 Financial Statements and Reports. Furnish to the Agent the
following financial statements and reports:

          (a) as soon as available but not later than ninety (90) days after the
     end of each fiscal year of the Guarantor and the Borrowers, complete copies
     of the consolidated financial reports of the Guarantor and consolidating
     financial statements (which are not audited financial reports) of each
     Borrower, all in reasonable detail, which shall include at least the
     consolidated balance sheet of the Guarantor, each Borrower and their
     respective Subsidiaries as of the end of such year and the related
     consolidated statements of income and sources and uses of funds for such
     year, which shall be audited reports prepared by independent chartered
     accountants of international standing;

          (b) on the second Business Day prior to each Payment Date, deliver to
     the Agent and the Lenders a monthly report certified by the Chief Financial
     Officer of TBS Shipping Services Inc., in the form of Exhibit D hereto,
     certifying compliance with the covenants set forth in Section 6.14 and
     Section 6.16 and showing the calculations thereof in reasonable detail;

          (c) as soon as available but not less than forty-five (45) days after
     the end of each of the first three quarters of each fiscal year of the
     Guarantor and each Borrower, a quarterly interim consolidated balance sheet
     of the Guarantor and consolidating balance sheet of each Borrower and the
     related consolidated profit and loss statements and sources and uses of
     funds, all in reasonable detail, unaudited, but certified to be true and
     complete by the chief financial officer of the Guarantor or such Borrower
     (as the case may be);

          (d) at such time as it may be required to file the following, within
     ten (10) days of the filing thereof, copies of all registration statements
     and reports on Forms 10-K, 10-Q and 8-K (or their equivalents) and other
     material filings which the Guarantor and/or a Borrower shall have filed
     with the SEC or any similar governmental authority; and

          (e) promptly upon the delivery thereof to the equityholders of a
     Credit Party, copies of all financial statements, reports, proxy
     statements, notices and other communications transmitted to all of such
     equityholders;

          (f) at such time as the financial statements described in Sections 6.
     07(a) and 6.07(c) are delivered, a certificate of the Chief Financial
     Officer of TBS Shipping Services Inc. (i) certifying such Credit Party's
     compliance with each of its covenants contained herein and showing the
     calculations thereof (with respect to the covenants in Sections 6.14 and
     6.16 hereof and, only with delivery of the financial statements described
     in Section 6.07(a), Section 6.17 hereof) in reasonable detail and (ii)
     stating that the financial statements delivered in accordance with Sections
     6.07(a) and 6.07(c) are


                                      -30-



     complete and correct in all material respects and present fairly the
     financial condition and results of operations of such Credit Party and its
     Subsidiaries as of the dates and for the periods indicated, in accordance
     with GAAP (subject as to interim statements to normal year-end adjustments
     and that the delivery of "consolidating financial statements" is not GAAP);

          (g) any other information regarding the Guarantor and/or a Borrower
     that is material to the Transaction Documents or the Loans as any Lender;
     through the Agent, may reasonably request; and

          (h) a copy of each survey or inspection report issued by an Approved
     Jurisdiction promptly after issuance thereof.

     Upon its receipt, the Agent shall promptly deliver the above referenced
financial statements and other information to the Lenders.

     Section 6.08 Access to Books and Records. Permit the Agent and each Lender,
(including, for greater certainty, their respective duly authorized agents and
officers), during normal business hours and upon reasonable notice, to (a)
examine the accounts and books and records of each Credit Party and to make
copies and extracts therefrom, and (b) discuss the affairs, finances, books and
records and accounts of each Credit Party, and be advised as to the same by, the
officers of each Credit Party as shall be relevant to the performance or
observance of the terms, covenants or conditions of this Agreement, the other
Transaction Documents or the financial condition of each Credit Party. The
Credit Parties, jointly and severally, agree to reimburse the Agent and each
Lender (including their authorized agents and officers) for all reasonable
costs, fees and expenses incurred in connection with any such inspection.

     Section 6.09 Notifications. Give prompt written notice to the Agent of (a)
any Default of which each Borrower has actual knowledge or an Event of Default
specifying the same and the steps being taken to remedy the same, (b) any
litigation or governmental proceeding pending or, to the best knowledge of a
Borrower or the Guarantor, threatened against a Borrower or the Guarantor or
against any of their respective Subsidiaries which could reasonably be expected
to result in a Material Adverse Change, (c) the withdrawal of any Vessel's
rating by its classification society or the issuance by such classification
society of any material recommendation or notation affecting class, (d) any
change in the address or location in the chief executive office or principal
place of business of a Borrower or the Guarantor and (e) any other event or
condition which could reasonably be expected to result in a Material Adverse
Change.

     Section 6.10 Performance of Obligations. Not take, or fail to take, any
action, or fail to use commercially reasonable efforts to prevent any action to
be taken by others, (a) which would release any Person from any of such Person's
covenants or obligations under any agreement or instrument included in the
Security Documents, or (b) which would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or
effectiveness of, any such agreement or instrument in a manner materially
adverse to the Agent or the Lenders.

     Section 6.11 Environmental Matters. Promptly, and in any event within five
(5) Business Days after an officer of a Credit Party or any of its Subsidiaries
obtains actual


                                      -31-



knowledge thereof, give written notice to the Agent of one or more of the
following environmental matters, unless, in each case, such environmental
matters could not, individually or when aggregated with all other such
environmental matters, be reasonably expected to result in a Material Adverse
Change:

          (a) any pending or threatened in writing Environmental Claim against
     the Guarantor, a Borrower or any of their respective Subsidiaries or any
     Vessel or Real Property owned or operated by the Guarantor, a Borrower or
     any of their respective Subsidiaries;

          (b) any condition or occurrence on or arising from any Vessel or Real
     Property owned or operated by the Guarantor, a Borrower or any of their
     respective Subsidiaries that (i) results in noncompliance by the Guarantor,
     a Borrower or any of their respective Subsidiaries with any applicable
     Environmental Law or (ii) could reasonably be expected to form the basis of
     an Environmental Claim against the Guarantor, a Borrower or any of their
     respective Subsidiaries or any such Vessel or Real Property;

          (c) any condition or occurrence on any Vessel or Real Property owned
     or operated by the Guarantor, a Borrower or any of their respective
     Subsidiaries that could reasonably be expected to cause such Vessel or Real
     Property to be subject to any restrictions on the ownership, occupancy, use
     or transferability by the Guarantor, a Borrower or any of their respective
     Subsidiaries of such Vessel or Real Property under any Environmental Law;
     and

          (d) the taking of any removal or remedial action in response to the
     actual or alleged presence of any Hazardous Material on any Vessel or Real
     Property owned or operated by the Guarantor, a Borrower or any of their
     respective Subsidiaries as required by any Environmental Law or any
     governmental or other administrative agency; provided that in any event the
     Guarantor and each Borrower shall deliver to each Lender all material
     notices received after the date hereof by any of them or any of their
     respective Subsidiaries from any Governmental Authority under, or pursuant
     to, CERCLA.

          (e) All such notices shall describe in reasonable detail the nature of
     the claim, investigation, condition, occurrence or removal or remedial
     action and each Borrower or such Subsidiary's response thereto. In
     addition, upon the request of the Agent, each Credit Party will provide the
     Lenders with copies of all material communications with any Governmental
     Authority relating to Environmental Laws, all material communications with
     any Person (other than their attorneys) relating to any Environmental Claim
     of which notice is required to be given pursuant to this Section 6.11, and
     such detailed reports of any such Environmental Claim as may reasonably be
     requested by the Agent on behalf of the Lenders.

     Section 6.12 Transaction Document Obligations. Pay the Notes according to
the reading, tenor and effect thereof, and do and perform every act and
discharge all of the obligations provided to be performed by each Borrower under
the Transaction Documents, including this Agreement, at the time or times and in
the manner specified, and cause the


                                      -32-



Borrowers to take such action with respect to their obligations to be performed
and discharged under the Transaction Documents to which they respectively are
parties.

     Section 6.13 ERISA. Promptly upon learning of the occurrence or the
expected occurrence of (i) any material liability of any Credit Party or any
ERISA Affiliate pursuant to ERISA in connection with the termination of any Plan
(if any) or withdrawal or partial withdrawal of any multi-employer plan (as
defined in ERISA), (ii) a failure to satisfy the minimum funding standards of
Section 412 of the Code or Part 3 of Title I of ERISA by any Plan (if any) for
which any Credit Party or any ERISA Affiliate is plan administrator (as defined
in ERISA) other than to the extent such failure could not reasonably be expected
to result in a Material Adverse Change, (iii) a plant closing or mass layoff (as
defined in the Worker Adjustment and Retraining Notification Act) of any
Borrower, the Guarantor or any ERISA Affiliate; (iv) any Borrower, the Guarantor
or any ERISA Affiliate becoming liable for material increases in retiree
medical, life insurance or other death benefits (contingent or otherwise) (other
than as a result of a continuation of medical coverage required under section
4980B of the Code or the insurance coverage continuation provisions of
applicable state law); or (v) a failure to satisfy the conditions represented,
warranted and agreed to in Section 4.10 of this Agreement other than to the
extent such failure could not reasonably be expected to result in a Material
Adverse Change, furnish or cause to be furnished to the Agent written notice
thereof. Within ten (10) days of sending or receipt by Borrower, copies of all
filings or correspondence with the Internal Revenue Service, Pension Benefit
Guaranty Corporation ("PBGC"), Department of Labor, Employee Benefit Plan (if
any), Multiemployer Plan (if any) or union, regarding any Plan (if any), or
regarding or disclosing any liability or potential liability or violation of law
under any such employee benefit plan or any notice from the Department of Labor
or Internal Revenue Service of assessment or investigation regarding a
prohibited transaction under Section 4975 of the Code or Section 406 of ERISA,
notice from the Internal Revenue Service of imposition of excise tax with
respect to an Employee Benefit Plan (if any), or any Form 5500 filed by any
Borrower with respect to an Employee Benefit Plan (if any) which includes a
qualified accountant's opinion. Borrower further covenants and agrees to deliver
to the Agent such certifications or other evidence from time to time throughout
the term of the Loan, as reasonably requested by the Agent or the Lender in its
sole discretion, that (i) neither Borrower nor Guarantor are an "employee
benefit plan" as defined in Section 3(3) of ERISA, which is subject to Title I
of ERISA, or a "governmental plan" within the meaning of Section 3(3) of ERISA;
(ii) neither Borrower nor Guarantor are subject to state statutes applicable to
Borrower regulating investments and fiduciary obligations of Borrower with
respect to governmental plans; and (iii) at least one of the following
circumstances is true with respect to each of Borrower and Guarantor:

          (i)  Equity interests in Borrower or Guarantor are publicly offered
               securities, within the meaning of 29 C.F.R. Section
               2510.3-101(b)(2);

          (ii) Less than 25 percent of each outstanding class of equity
               interests in Borrower or Guarantor are held by "benefit plan
               investors" within the meaning of 29 C.F.R. Section
               2510.3-101(f)(2); or

          (iii) Borrower or Guarantor qualifies as an "operating company" or a
               "real estate operating company" within the meaning of 29 C.F.R.
               Section 2510.3-


                                      -33-



               101(c) or (e) or an investment company registered under The
               Investment Company Act of 1940.

     Section 6.14 Fixed Charge Coverage Ratio. With respect to the Guarantor,
maintain a Fixed Charge Coverage Ratio (on a consolidated trailing twelve month
basis), as of any date of determination, of not less than 2.00 to 1.00.

     Section 6.15 Obligations of Westbrook. With respect to the Guarantor, as
the sole equityholder of Technotrade, cause Technotrade to cause Westbrook to
perform and comply with all duties, obligations and covenants set forth herein
and in the Pledge Agreement.

     Section 6.16 Total Funded Debt Ratio. With respect to the Guarantor,
maintain a Total Funded Debt Ratio, determined as of the last day of each of the
Guarantor's fiscal quarters commencing June 30, 2004, of not more than 3.00 to
1.00.

     Section 6.17 Minimum Fair Market Value of the Vessels. Maintain an Asset
Coverage Ratio at all times less than 0.85 to 1.00. If the Asset Coverage Ratio
is equal to or more than 0.85 to 1.00, then the Borrower, in order to cause the
Asset Coverage Ratio to be equal to or less than 0.70 to 1.00, shall, within
five (5) Business Days of such failure (x) pledge additional collateral
acceptable to the Agent and the Lenders (as determined in their sole discretion)
and/or (y) pay that much of the principal balance of all outstanding Advances in
order to cause compliance with this Section 6.17; provided that the amount of
any payment made pursuant to this Section 6.17 shall not require payment of the
related Make-Whole Amount for the principal amount of any Advances prepaid to an
Asset Coverage Ratio of 0.70 to 1.00 (for greater certainty, the Borrowers shall
pay the Make-Whole Amount in respect of any payment of principal of the Advances
resulting in an Asset Coverage Ratio of less than 0.70 to 1.00). Together with
delivery of the financial statements described in Section 6.07(a), each Borrower
shall deliver a certification certifying, based on its reasonable business
judgment and compared to Vessels of like character and quality (assuming
compliance with the maintenance obligations set forth herein and in each charter
of a Vessel), its compliance with this Section 6.17.

     Section 6.18 Ownership of Borrowers. With respect to the Guarantor, own
directly all of the Equity Interests of Technotrade, cause Technotrade to own
directly all of the Equity Interests of Westbrook and cause Technotrade to cause
Westbrook to own directly all of the Equity interests of each Borrower. As the
indirect equity holder of each other Credit Party, the Guarantor will keep (or
cause to be kept) in full force and effect each other Credit Party's existence,
rights and franchises as a corporation under the laws of its jurisdiction of
organization and will preserve (or cause to preserve) its and their
qualification to do business as a foreign company in each jurisdiction in which
such qualification is necessary to permit performance of the duties of the
Credit Parties under this Agreement and each other Transaction Document.

     Section 6.19 Delivery of Charters. Promptly deliver (or cause to be
delivered) each charter with respect to any of the Vessels either (x) between a
Credit Party, PacRim, TBS Shipping Services Inc., Roymar Ship Management, Inc.
or any of their respective Affiliates or (y) having a term of at least six (6)
months (including any renewal options) and entered into between a Credit Party
or any of its Affiliates and another Person, between PacRim or any of its
Affiliates and another Person, between Roymar Ship Management, Inc. or any of
its Affiliates


                                      -34-



and another Person or between TBS Shipping Services Inc. or any of its
Affiliates and another Person. The Credit Parties shall deliver (or cause to be
delivered) an assignment of charter (in form and substance satisfactory to the
Agent) with respect to each charter of a Vessel between, on the one hand, a
Credit Party, PacRim, TBS Shipping Services Inc., Roymar Ship Management, Inc.
or any of their respective Affiliates and, on the other hand, any other Person.

     Section 6.20 Vessel Operations and Management. (a) Procure that each of the
Vessels, shall at all times be (i) managed by the technical and commercial
managers managing the Vessels as of the Closing Date or the applicable Drawdown
Date (as the case may be), or such other managers acceptable to the Requisite
Lenders in accordance with vessel management agreements acceptable to the
Requisite Lenders, (ii) flagged under the laws of the Approved Jurisdictions and
(iii) classed in the highest classification and rating for vessels of the same
age and type without any outstanding conditions or recommendations affecting
class (other than those for which the time prescribed for curing the condition
or recommendation has not passed) with Lloyds Registry of Shipping, Det Norske
Veritas, Bureau Veritas, American Bureau of Shipping, Nippon Kaiji Kyokai or
such other classification society classing the Vessels as of the Closing Date or
the applicable Drawdown Date (as the case may be), or with such other
classification society acceptable to the Agent and permitted under the Approved
Jurisdiction where the Mortgage is filed; provided, however, if a Vessel is
reflagged under the laws of an Approved Jurisdiction, it shall be a condition to
such reflagging that the Guarantor and the Borrowers deliver to the Agent (A)
evidence (including an opinion of counsel, in form and substance satisfactory to
the Agent) that such Vessel has been registered in the name of the related
Borrower under the laws of such jurisdiction; (B) evidence (including an opinion
of counsel, in form and substance satisfactory to the Agent) that the related
Mortgage has been properly recorded under the laws of such jurisdiction and
constitutes a first priority mortgage subject only to Permitted Encumbrances;
(C) evidence that all necessary governmental or regulatory approvals, licenses
and authorities which are necessary to the operation of the Vessel have been
obtained; (D) evidence that insurances in compliance with the requirements of
the Mortgage have been obtained; and (E) such other items as the Agent may
reasonably require.

          (b) Comply in all material respects or to procure that the operator of
     each of the Vessels will comply in all material respects within the
     requisite applicable time limits for vessels of the same type, size, age
     and flag of the Vessels with the International Management Code for the Safe
     Operation of Ships and for Pollution Prevention (as the same may be amended
     from time to time, the "ISM Code") adopted by the International Maritime
     Organization or any replacement of the ISM Code and in particular, without
     prejudice to the generality of the foregoing, as and when required to do so
     by the ISM Code and at all times thereafter, (i) to hold or to procure that
     the operator of each of the Vessels holds, a valid Document of Compliance
     (being a document issued to a vessel operator as evidence of its compliance
     with the requirements of the ISM Code) duly issued to the related Borrower
     or the operator (as the case may be) pursuant to the ISM Code and a valid
     Safety Management Certificate (being a document issued to a vessel as
     evidence that the vessel operator and its shipboard management operate in
     accordance with an approved structured and documented system enabling the
     personnel of that vessel operator to implement effectively the safety and
     environmental protection policy of that vessel operator) duly issued to
     each of the Vessels pursuant to the ISM Code, (ii) to provide the Agent
     with copies of any such Document of Compliance and Safety


                                      -35-



     Management Certificate promptly following the issue thereof and after every
     renewal and (iii) to keep or to procure that there is kept, on board each
     of the Vessels a copy of any such Document of Compliance and the original
     of any such Safety Management Certificate.

          (c) Ensure that the laying-up of any Vessel is commercially
     reasonable; provided that each laid-up Vessel shall be maintained in
     accordance with ordinary and reasonable commercial standards for laid-up
     vessels, and that the Agent is notified of each lay-up within thirty (30)
     days after the commencement thereof.

     Section 6.21 Appraisals. Upon the request of the Agent and at the expense
of the Credit Parties, jointly and severally, furnish the Agent with appraisals
from an Appraiser for each of the Vessels; provided, however, except during the
occurrence of a Default, such request shall not be made more than once in any
twelve-month period.

     Section 6.22 Reimbursement for Expenses. Reimburse the Agent, or cause the
Borrowers, Westbrook and the Guarantor, jointly and severally, to reimburse the
Agent, promptly, with interest at the interest rate applicable to the Notes, for
any and all expenditures which the Agent may from time to time make in providing
protection in respect of insurance, discharge or purchase of liens, taxes, dues,
assessments, governmental charges, fines and penalties lawfully imposed,
repairs, attorneys' fees and expenses, necessary or appropriate translation fees
for documents made in a language other than English and other matters, in each
case in respect of which a Credit Party has Defaulted in its obligation
hereunder with respect to such matters, or a Credit Party has Defaulted in its
Obligations hereunder with respect to such matters, to provide. Such obligation
of the Borrowers and the Guarantor to reimburse the Agent shall be an additional
indebtedness due from the Credit Parties, secured by the Collateral and the
Transaction Documents, and shall be payable by the Credit Parties on demand
(unless notice of demand is waived herein or in another agreement). The Agent,
though privileged to do so, shall be under no obligation to the Borrowers or the
Guarantor to make any such expenditures, nor shall the making thereof relieve
the Borrowers or the Guarantor of any default in that respect. This Section 6.22
shall survive any termination of this Agreement and the satisfaction of the
Obligations.

     Section 6.23 Insurance. The Guarantor and the Borrowers shall cause each
Vessel to be insured by a financially sound and reputable insurance company,
satisfactory to the Requisite Lenders, against loss or damage by fire,
explosion, theft, Environmental Claim or other hazards which are included under
casualty insurance coverage in amounts consistent with normal industry
practices, and maintain or cause to be maintained with such insurers an
unlimited amount of protection and indemnity insurance (except for oil pollution
risks which is limited to One Billion Dollars ($1,000,000,000) per Vessel) when
any part of the Vessel is operated and at least the same amount of comprehensive
liability insurance when the Vessel is in storage, under policies which may
cover the Guarantor and any of its Subsidiaries, and against other hazards,
risks and liability to persons and property to the extent and in the manner
customary for companies in similar businesses. The Credit Parties shall deliver
to the Agent, from time to time upon its request, a detailed list of the
insurance then in effect, stating the names of the insurance companies, the
amounts of the insurance, the dates of the expiration thereof and the properties
and risks covered thereby. All such policies shall be in form and substance
satisfactory to the


                                      -36-



Agent. Any and all insurance proceeds in respect of a Vessel shall be paid in
accordance with the terms and conditions of the related Security Documents.

     Section 6.24 Reserved.

     Section 6.25 Purchase Agreements. On their own behalf and on behalf of the
Agent and the Lenders, enforce all of its material rights under any agreement
pursuant to which it acquired a Vessel and all warranties in respect of a
Vessel.

     Section 6.26 Investment Company Act. Conduct its operation in a manner
which will not subject it to registration as an "investment company" under the
Investment Company Act.

     Section 6.27 Payments on Collateral. If it shall receive from any Person
any amounts with respect to the Collateral, then, in accordance with this
Agreement and the other Transaction Documents, it shall receive such payment in
trust for the Agent (as secured party hereunder and under the other Transaction
Documents) and from and after the occurrence and continuance of an Event of
Default or as otherwise provided in the Transaction Documents, it shall
immediately remit such amounts to the Agent.

     Section 6.28 Maintenance of Vessels. At its own cost and expense, maintain,
repair, refurbish and keep (or cause to be maintained, repaired, refurbished or
kept) each Vessel, (i) according to prudent industry practice, (ii) seaworthy
and otherwise capable of performing in all material respects the function for
which it was designed and shall be in good working order with allowance for
normal wear and tear, (ii) suitable for continued commercial use, (iii) in a
manner consistent with maintenance, repair and refurbishment practices used by
it in respect of Vessels owned, serviced or leased by it (or any of its
Affiliate), (iv) in accordance in all material respects with all manufacturer's
warranties in effect and in accordance with all applicable provisions, if any,
of insurance policies required to be maintained, and (v) in compliance in all
material respects with any applicable laws (including, without limitation,
annual inspections required under Panamanian law). In no event shall it
adversely discriminate in any material respect as to the use or maintenance,
repair or refurbishment of any Vessel as compared to any other vessel of a
similar nature which it owns, services or leases. It will maintain, or cause to
be maintained, in all material respects all records, logs and other materials
required by applicable law, relevant industry standards or any Governmental
Authority having jurisdiction over any Vessel. All such records, logs and other
materials shall be held for the benefit of the Agent and the Lenders.

     Section 6.29 Registration and Documentation. A Borrower may provisionally
register title to a Vessel in accordance with the laws of an Approved
Jurisdiction. Each Credit Party shall, within six months of a Borrower's receipt
of the certified copy of the legalized or apostilled Bill of Sale and Acceptance
for a Vessel or such other period as may be permitted under the laws of the
Approved Jurisdiction and that does not result in the deletion of the Vessel
from the Registry for any period of time (x) obtain permanent registration of
each Vessel in its Approved Jurisdiction and take all actions incidental to
obtaining such permanent registration (including, without limitation, completing
the inspection required under Panamanian law) and (y) deliver a certified copy
of permanent registration for each Vessel to the Agent. Each Borrower also
agrees to cause this Mortgage to be translated into Spanish by an authorized


                                      -37-



Panamanian public translator, protocolized by a notary public into a notarial
document which can be filed at the Panamanian public registry and filed at the
public registry of Panama on or before December 1, 2004.

                                   ARTICLE VII
                               NEGATIVE COVENANTS

     The Guarantor covenants and agrees that, so long as this Agreement shall
remain in effect or any of the Obligations shall be outstanding, it shall not,
and shall cause Westbrook to not permit any of the Borrowers to, without the
prior written consent of the Requisite Lenders:

     Section 7.01 Indebtedness. With respect to a Borrower, contract for,
create, incur, assume or suffer to exist any Indebtedness.

     Section 7.02 Liens. Create, assume, permit or suffer to exist any mortgage,
pledge, encumbrance, security interest or other Lien securing an obligation on
any Vessel or on any other assets of a Borrower, whether now owned or hereafter
acquired, except Permitted Encumbrances.

     Section 7.03 Asset Sales. Without the prior written consent of the
Requisite Holders, sell, lease, transfer, assign or otherwise dispose of any
Vessel or other Collateral.

     Section 7.04 Assignment of Insurances. Except pursuant to the Assignment of
Earnings and Insurances, grant an assignment or permit or suffer to exist any
mortgage, pledge, encumbrance, security interest or other Lien on the Insurances
relating to a Vessel.

     Section 7.05 Sale of Notes or Accounts Receivable. With respect to the
Borrowers, sell, lease, transfer, assign or otherwise dispose of any notes,
accounts receivable or other obligations owed to by any Person, except (a) for
the purpose of collection in the ordinary course of its business and (b) to the
extent that, both before and after giving effect to any such sale, lease,
transfer, assignment or disposition (taking into account any prepayment to be
made to the Lenders under this Agreement from the net proceeds of any such sale,
lease, transfer, assignment or disposition), no Default or Event of Default
would exist hereunder.

     Section 7.06 Sale and Leaseback. Without the prior written consent of the
Requisite Lenders, enter into any arrangements, directly or indirectly, with any
Person whereby it shall sell or transfer any Collateral or other property,
whether real or personal, of the Borrowers, whether now owned or hereafter
acquired.

     Section 7.07 Restricted Payments. With respect to any Borrower, except in
connection with the exercise of rights by the Agent under a Pledge Agreement,
from and after the occurrence of a Default, declare or pay any dividend or make
any distribution on its capital stock or purchase, redeem, acquire or otherwise
retire any capital stock for value (in each case, a "Restricted Payment").

     Section 7.08 Investments. With respect to a Borrower, make any Investment
unless at the time of, and after giving effect to, the making of any proposed
Investment, no Default or Event of Default has occurred and is continuing or
would occur as a consequence of the making


                                      -38-



of such Investment. Notwithstanding the foregoing sentence, the Borrowers may
make the following Investments at any time: (a) direct obligations of, or
obligations the principal of and interest on which are unconditionally
guaranteed by, the United States (or by any agency thereof to the extent such
obligations are backed by the full faith and credit of the United States), in
each case maturing within one year from the date of acquisition thereof, and (b)
investments in certificates of deposit, banker's acceptances and time deposits
maturing within the earlier of (x) the Maturity Date and (y) 180 days from the
date of acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any domestic office of any
commercial bank organized under the laws of the United States or any State
thereof which has a combined capital and surplus and undivided profits of not
less than $500,000,000.

     Section 7.09 Restriction on Payment Restrictions Affecting Borrowers.
Create or otherwise cause or suffer to exist or become effective any encumbrance
or restriction (other than pursuant to this Agreement) on the ability of a
Borrower to (a) pay dividends or make any other distributions on its capital
stock or any other interest or participation in its profits or pay any
Indebtedness owed to the Guarantor, (b) make advances or loans to the Guarantor
or (c) transfer any of its properties or assets to the Guarantor, except for
such encumbrances or restrictions existing under or by reason of applicable law.

     Section 7.10 Change in Business. Engage (directly or indirectly) primarily
in any business other than its business as of the Closing Date and other
businesses reasonably related thereto.

     Section 7.11 OFAC. Permit any Vessel pledged as Collateral to be
maintained, insured, located, operated or used (directly or indirectly) in
violation of any United States statutes, rules or regulations, in a Prohibited
Jurisdiction or by a Prohibited Person, and no lessee or sublessee shall be a
Prohibited Person or organized in a Prohibited Jurisdiction; provided that, with
respect to a Prohibited Jurisdiction, a Vessel may be located, operated or used
in such Prohibited Jurisdiction to the extent that (a) TBS North America Liner,
Ltd and/or the operator of the Vessel, as required by law, has obtained all
required valid and effective licenses from all United States Governmental
Authorities permitting the location, operation and/or use of such Vessel in such
Prohibited Jurisdiction notwithstanding a prohibition order (or any similar
order or directive), sanction or restriction promulgated or administered by any
Governmental Authority, including, without limitation, the Office of Foreign
Assets Control of the United States Treasury Department, the United States
Department of Commerce and the United States Department of State, (b) such
operator locates, operates and/or uses such Vessel in accordance with the terms
and conditions of such license, (c) such license is maintained in full force and
effect during any location, operation and/or use of such Vessel in such
Prohibited Jurisdiction, and (d) a certified copy of such license (together with
renewals thereof and any amendments, supplements, or other modifications
thereto) has been promptly delivered to the Agent.

     Section 7.12 Transactions with Affiliates. With respect to a Borrower,
enter into any transaction or series of related transactions, whether or not in
the ordinary course of business, with any Affiliate, other than on terms and
conditions substantially as favorable to such Person as would be obtainable by
such Person at the time in a comparable arm's-length transaction with a Person
other than an Affiliate. With respect to the Guarantor or Westbrook, enter into
any transaction or series of related transactions, whether or not in the
ordinary course of business,


                                      -39-



with any Borrower, other than on terms and conditions substantially as
favorable to such Person as would be obtainable by such Person at the time in a
comparable arm's-length transaction with a Person other than an Affiliate.
Notwithstanding the foregoing, the restrictions set forth in this Section 7.12
shall not apply to (a) the payment of reasonable and customary fees to directors
of a Borrower who are not employees of such Borrower, (b) any other transaction
with any employee, officer or director of the Guarantor, a Borrower or any of
their respective Subsidiaries pursuant to employee benefit plans and
compensation arrangements in amounts customary for corporations similarly
situated to the Guarantor, such Borrower or any such Subsidiary and entered into
the ordinary course of business and approved by the Board of Directors of the
Guarantor or such Borrower or any committee thereof or the Board of Directors of
such Subsidiary, (c) any Restricted Payment permitted by Section 7.07 and (d)
the Pooling Arrangements.

     Section 7.13 Changes in Offices or Names. Change the name or location of
the chief executive office of any Credit Party, the office of the chief place of
business any such Credit Parties, or the office of the Credit Parties in which
the records relating to the Collateral and the Credit Parties have taken at
their own cost and expense all action necessary or advisable so that such
changes do not impair the security interest, perfection or priority of the Agent
in, to or under any of the Collateral are kept unless the Agent shall have
received thirty (30) days prior written notice of such change.

     Section 7.14 Changes in Fiscal Year. Change its fiscal year.

     Section 7.15 Other Indebtedness. With respect to any Vessel owned
(directly, beneficially or controlled by agreement), engage in any offering,
placement or arrangement of any Indebtedness of the Credit Parties or their
Affiliates, other than the transaction described in this Agreement.

     Section 7.16 Consolidation, Merger and Sale of Assets. With respect to a
Borrower, consolidate with, or merge with or into, any other Person or convey,
sell, lease or otherwise dispose of (or agree to do any of the foregoing at any
future time) all or substantially all of its property or assets; and, with
respect to the Guarantor, consolidate with, or merge with or into, any other
Person or convey, sell, lease or otherwise dispose of (or agree to do any of the
foregoing at any future time) all or substantially all of its property or assets
unless the Guarantor has satisfied each of the following conditions:

          (a) The entity formed by such consolidation or into which such Credit
     Party is merged or the Person which acquires by conveyance or transfer
     substantially all of the assets of such Credit Party as an entirety shall
     expressly assume all of the obligations of such Credit Party under this
     Agreement and the other Transaction Documents pursuant to a written
     supplement to this Agreement executed in accordance with Article XI.

          (b) Immediately prior to and after giving effect to such transaction,
     no Default or Event of Default shall have occurred and be continuing and
     the Agent shall have received a certificate from an Executive Officer to
     such effect.


                                      -40-



          (c) The Agent shall have received an opinion of counsel (in form and
     substance satisfactory to the Agent) regarding the due existence and good
     standing of the merged or consolidated entity, the due assumption,
     legality, validity and enforceability of this Agreement and the other
     Transaction Documents, the title to the related Vessels and the priority of
     the Mortgages, as applicable.

          (d) Upon any consolidation or merger, or any conveyance or transfer of
     substantially all of the assets of such Credit Party as an entirety in
     accordance with this Section 7.16, the successor entity formed by such
     consolidation or into which such Credit Party is merged or to which such
     conveyance or transfer is made shall succeed to, and be substituted for,
     and may exercise every right and power of, such Credit Party under this
     Agreement and the other Transaction Documents with the same effect as if
     such successor entity had been named as a Credit Party herein. No such
     conveyance or transfer of substantially all of the assets of such Credit
     Party as an entirety shall have the effect of releasing such Credit Party
     or any successor entity which shall theretofore have become such in the
     manner prescribed in this Section 7.16 from its liability hereunder Nothing
     in this Section 7.16 shall restrict any Borrower from chartering the
     Vessels so long as such charters are not bareboat charters.

     Section 7.17 Prohibited Transactions. Neither Borrower, Guarantor nor any
ERISA Affiliate has engaged in any transaction prohibited by Section 408 of
ERISA or Section 4975 of the Code.

     Section 7.18 Amendment or other Modification of Certain Documents. Without
the prior written consent of the Agent, none of the Borrowers or the Guarantor
shall (or shall permit) amend or modify (or permit the amendment or other
modification) of (x) the articles of incorporation, by-laws or other
organizational documents of any Borrower in any manner that would adversely
affect the rights of the Agent or the Lenders hereunder or under the other
Transaction Documents or impair the duties or obligations of a Borrower
hereunder or under any other Transaction Document, or (y) any Filipino Bareboat
Charter, any Memorandum of Three Party Agreement or any pooling agreement to
which a Borrower is a party or a Vessel is subject; provided that the Credit
Parties shall extend the term of the Filipino Bareboat Charter and each
Memorandum of Three Party Agreement from time to time so that the term thereof
does not expire prior to the satisfaction and payment of all obligations of the
Credit Parties under the Transaction Documents.

     Section 7.19 Regarding the Vessels. No Credit Party shall permit the
registration of any Vessel in an Approved Jurisdiction to lapse and, without the
prior written consent of the Agent, delete the registration of any Vessel from
the registry of any Approved Jurisdiction.

                                  ARTICLE VIII
                             AGREEMENT TO GUARANTEE

     Section 8.01 Obligations Guaranteed.

          (a) In consideration for the Commitments, the Guarantor hereby
     unconditionally and irrevocably guarantees to each of the Agent and the
     Lenders (i) the


                                      -41-



     full and prompt payment of the principal of the Notes and the indebtedness
     represented thereby when and as the same shall become due and payable,
     whether at the stated maturity thereof, by acceleration, call for
     redemption or otherwise; (ii) the full and prompt payment of interest on
     the Notes when and as the same shall become due and payable (including
     interest at the Overdue Rate on any part of the principal amount, interest
     amount or other Obligation due under this Agreement and not paid when due);
     (iii) the full and prompt payment of an amount equal to each and all of the
     payments and other sums when and as the same shall become due, required to
     be paid by a Borrower under the terms of this Agreement and under each of
     the other Transaction Documents to which it is a party (including, without
     limitation, any indemnity for any loss, claim, expense or liability
     (including, without limitation, any Environmental Claims) that the Agent, a
     Lender or any of their respective officers, directors, employees or agents
     may suffer or incur) and (iv) the full and prompt performance and
     observance by a Borrower and Westbrook of the obligations, covenants and
     agreements required to be performed and observed by such Borrower and/or
     Westbrook under the terms of this Agreement and under each of the other
     Transaction Documents to which it is a party (items (i) through (iv), the
     "Guarantee Obligations"). The Guarantor hereby irrevocably and
     unconditionally agrees that upon any default by a Borrower in the payment,
     when due, of any principal of, interest on or other Obligations (including
     amounts in respect of fees and indemnification owing to the Agent or the
     Lenders) due under the Notes, this Agreement or any other Transaction
     Document, the Guarantor will promptly pay the same within ten (10) days
     after receipt of written demand therefor from the Agent or any Lender. The
     Guarantor further hereby irrevocably and unconditionally agrees that upon
     any default by a Borrower in any of its obligations, covenants and
     agreements required to be performed and observed by such Borrower under
     this Agreement or under any other Transaction Document to which it is a
     party, the Guarantor will effect the observance of such obligations,
     covenants and agreements within ten (10) days after receipt of written
     demand therefor from the Agent or any Lender. The Guarantor hereby
     irrevocably and unconditionally agrees to the addition of additional
     Borrowers and Additional Loans (which shall become part of the Guarantee
     Obligations) pursuant to the terms and conditions of this Agreement, and
     that its guaranty shall be fully applicable to all Obligations of such
     Borrowers.

          (b) All payments by the Guarantor shall be paid in the lawful currency
     of the United States. Each and every default (i) in the payment of the
     principal of, premium, if any, interest on or other Obligations due under
     the Notes, (ii) in the payment of any sum required to be paid by a Borrower
     under the terms of this Agreement or the other Transaction Documents, or
     (iii) in the prompt performance and observance by a Borrower of all of the
     obligations, covenants and agreements required to be performed and observed
     by such Borrower under the terms of the Transaction Documents, shall give
     rise to a separate cause of action hereunder, and separate suits may be
     brought hereunder as each cause of action arises.

          (c) The Guarantor further agrees that the Guarantee Obligations
     constitute an absolute, unconditional, present and continuing guarantee of
     performance and payment and not of collection, and waives any light to
     require that any resort be had by the Agent and the Lenders to (i) any
     security held by or for the benefit of the Agent and


                                      -42-



     the Lenders for payment of the principal of, premium, if any, interest on
     or other Obligations due under the Notes, this Agreement or the Transaction
     Documents, (ii) the Agent's and Lenders' right against any other Person, or
     (iii) any other right or remedy available to the Agent and the Lenders by
     contract, applicable law or otherwise. The Guarantee Obligations are
     direct, unconditional and completely independent of the obligations of any
     other Person or entity, and a separate cause of action or separate causes
     of action may be brought and prosecuted against the Guarantor without the
     necessity of any other party or previous proceeding with or exhausting any
     other remedy against any other Person who might have become liable for the
     indebtedness or of realizing upon any security held by or for the benefit
     of the Agent and the Lenders.

          (d) The Guarantor shall pay to the Agent and the Lenders all
     reasonable costs and expenses (including, without limitation, reasonable
     attorneys' fees) incurred by the Agent and the Lenders upon the occurrence
     of an Event of Default under any or all of the Transaction Documents.

     Section 8.02 Guarantee Obligations of Guarantor Unconditional. The
Guarantee Obligations shall be absolute and unconditional and shall remain in
full force and effect until (1) the entire principal of, premium, if any,
interest on and other Obligations due under the Transaction Documents shall have
been paid and (2) all other sums payable by the Borrowers and the Guarantor
under this Agreement and the other Transaction Documents have been paid in full
(including, without limitation, Section 8.01 hereof) have been paid in full,
and, to the extent permitted by law, such Guarantee Obligations shall not be
affected, modified, released or impaired by any state of facts or the happening
from time to time of any event, including, without limitation, any of the
following, whether or not with notice to or the consent of the Guarantor:

          (a) the invalidity, irregularity, illegality, frustration or
     unenforceability of, or any defect in, (i) any Transaction Document or (ii)
     any collateral security given in connection therewith;

          (b) any present or future law or order of any government (de jure or
     de facto) or of any agency thereof purporting to reduce, amend or otherwise
     affect the Notes or any other obligation of a Credit Party or any other
     obligor or to vary any terms of payment;

          (c) any claim of immunity on behalf of a Credit Party or any other
     obligor or with respect to any property of a Credit Party or any other
     obligor;

          (d) the waiver, compromise, settlement, release, extension, change,
     modification or termination of any or all of the obligations, covenants or
     agreements of (i) a Credit Party under this Agreement or any other
     Transaction Document (except by payment in full of all its Obligations
     under this Agreement) or (ii) the Guarantor with respect to the Guarantee
     Obligations (except by payment in full of all the Guarantee Obligations
     hereunder);


                                      -43-



          (e) the failure to give notice to the Guarantor of the occurrence of a
     Default or an Event of Default hereunder or under any other Transaction
     Document;

          (f) the transfer, assignment, sublease or mortgaging, or the purported
     or attempted transfer, assignment, sublease or mortgaging, of all or any
     part of the interest of a Credit Party in any of its properties, or any
     failure of or defect in the title with respect to a Borrower's interest in
     any of its properties;

          (g) the release, sale, exchange, surrender or other change in any
     collateral security for payment of the Obligations of the Borrowers;

          (h) the extension of the time for payment of any amounts payable on
     the Notes or any part thereof or of the time for performance of any other
     obligations, covenants or agreements under or arising out of this
     Agreement, any other Transaction Document or the extension or the renewal
     of any thereof;

          (i) the modification or amendment (whether material or otherwise) of
     any Guarantee Obligation, covenant or agreement set forth in any
     Transaction Document;

          (j) the taking of, or the omission to take, any of the actions
     referred to in this Agreement or any Transaction Document;

          (k) any failure, omission, delay, or lack on the part of the Agent or
     the Lenders or any other Person to enforce, assert or exercise any right,
     power or remedy conferred on the Agent and the Lenders or such other Person
     in this Agreement or any other Transaction Document;

          (l) the voluntary or involuntary liquidation, dissolution, sale or
     other disposition of all or substantially all the assets, marshalling of
     assets and liabilities, receivership, insolvency, bankruptcy, assignment
     for the benefit of creditors, reorganization, arrangement or composition
     with creditors or readjustment of, or other similar proceedings affecting
     the Guarantor or any of their assets, or any allegation or contest of the
     validity of this Agreement, or any other Transaction Document, or the
     disaffirmance or attempted disaffirmance of this Agreement or any other
     Transaction Document, in any such proceedings;

          (m) any event or action that would, in the absence of this Section,
     result in the release or discharge of the Guarantor from the performance or
     observance of any Guarantee Obligation, covenant or agreement contained in
     this Guarantee, other than the performance thereof;

          (n) the default or failure of any Guarantor to fully perform any of
     its Guarantee Obligations;

          (o) any other circumstances which might otherwise constitute a legal
     or equitable discharge or defense of a surety or a guarantor;

          (p) the actual or purported assignment of any of the Guarantee
     Obligations;


                                      -44-



          (q) the receipt and acceptance by the Agent or the Lenders of notes,
     checks or other instruments for the payment of money made by the Guarantor
     and any extensions and renewals thereof (other than the payment in full of
     the entire principal of, premium, if any, interest on and all other
     Obligations due under the Notes and all other sums payable by the Borrowers
     and the Guarantor under this Agreement and the other Transaction
     Documents);

          (r) to the extent permitted by law, the release or discharge of the
     Guarantor from the performance or observance of any guaranteed obligation,
     covenant or agreement contained herein by operation of law;

          (s) any release or impairment of the Collateral pledged under this
     Agreement or any other Transaction Document;

          (t) the release, substitution or replacement in accordance with the
     terms of any Transaction Document of any property subject thereto or any
     redelivery, repossession, surrender or destruction of any such property, in
     whole or in part;

          (u) any limitation on the liability or obligations of a Borrower under
     this Agreement or any other Transaction Document or any termination,
     cancellation, frustration, invalidity or unenforceability, in whole or in
     part, of this Agreement or any other Transaction Document, or any term
     thereof;

          (v) the merger or consolidation or any sale, lease or transfer of any
     or all of the assets of any Borrower or the Guarantor to any Person; or

          (w) any other occurrence whatsoever, whether similar or dissimilar to
     the foregoing.

     Section 8.03 Waiver by Guarantor; Expenses. The Guarantor hereby expressly
(A) waives notice from the Agent and the Lenders of its acceptance and reliance
on the Guarantor's Guarantee or of any action taken or omitted in reliance
hereon, (B) waives diligence, presentment, demand for payment, protest, any
requirement that any right or power be exhausted or any action be taken against
the Borrowers or against any other obligor under any of the Transaction
Documents or against the Collateral or any other collateral security for the
Obligations, (C) waives any right to require a proceeding first against the
Borrowers or to exhaust any security for the performance of the obligations of
the Borrowers, (D) agrees that the liability of the Guarantor shall not be
affected or decreased by any amendment, termination, extension, renewal, waiver,
modification or any, pledge or assignment of this Agreement or the rejection or
disaffirmance thereof in any bankruptcy or like proceedings, and (E) agrees that
if any payment under the Transaction Documents is rescinded or otherwise must be
returned by the Lenders or any assignee thereof for any reason whatsoever, then
the Guarantee Obligations shall continue to be effective or reinstated with
respect to such payment as though the Borrowers had never received such payment.
The Guarantor agrees to pay all costs, fees, commissions and expenses
(including, without limitation, all court costs and reasonable attorneys' fees)
which may be incurred by the Agent or the Lenders in enforcing or attempting to
enforce the Guarantee


                                      -45-



Obligations following any default on the part of the Guarantor hereunder,
whether the same shall be enforced by suit or otherwise.

     Section 8.04 Other Security. The Agent and Lenders may pursue their rights
and remedies against the Guarantor or any other Credit Party notwithstanding (a)
any other Guarantee of or security for the Obligations and (b) any action taken
or omitted to be taken by the Agent, the Lenders or any other Person to enforce
any of the rights or remedies under such other guarantee or with respect to any
other security.

     Section 8.05 No Set-off by the Guarantor. No set-off, abatement,
recoupment, counterclaim, reduction or diminution of an obligation, or any
defense of any kind or nature which the Guarantor has or may have with respect
to a claim hereunder, shall be available hereunder to the Guarantor against the
Agent or the Lenders.

     Section 8.06 Reserved.

     Section 8.07 Limitation on Liability. Any term or provision of this
Agreement or any other Transaction Document to the contrary notwithstanding, the
maximum, aggregate amount of the Obligations guaranteed hereunder by the
Guarantor shall not exceed the maximum amount that can be hereby guaranteed
without rendering this Agreement or any other Transaction Document, as it
relates to such Guarantor, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally.

                                   ARTICLE IX
              EVENTS OF DEFAULT; REMEDIES; APPLICATION OF PROCEEDS

     Section 9.01 Events of Default. Any one or more of the following events
shall constitute an Event of Default:

          (a) if any payment of any Reduction Amount, interest, fees, charge or
     any other Obligations due to the Agent or the Lenders under the Notes, this
     Agreement, the Mortgages, or any Transaction Document, whether at the
     stated maturity thereof or at any date fixed for payment by acceleration,
     by notice of prepayment or otherwise, shall not be made on the due date
     thereof and if such failure to pay shall remain unremedied for five (5)
     Business Days;

          (b) if any Credit Party (or Person acting on behalf of a Credit Party)
     shall default in the performance or observance of any covenant contained in
     Sections 6.01(a), 6.07, 6.14, 6.16, 6.17, 6.18, 6.23 or in Article VII of
     this Agreement, Section 4.01, Section 4.02 or Article V of the Assignment
     of Earnings and Insurances, the second sentence of Section 5 and Section
     7(a) of the Pledge Agreement(s) and Article I, Sections 4, 5(a)(ii), 7, 9,
     10, 12(a), 13(b), 14 and 19 of the Mortgages;

          (c) if any Credit Party (or Person acting on behalf of a Credit Party)
     shall default in any material respect in the performance or observance of
     any covenant contained in Article VI of this Agreement or any other
     covenant, agreement or condition (other than those set forth in (a) or (b)
     above) contained in this Agreement or in any other Transaction Document and
     such default shall not be cured by the earlier of (i) twenty (20)


                                      -46-



     days after an Executive Officer of such Credit Party had actual knowledge
     of such default and (ii) twenty (20) days after receipt by such Credit
     Party of notice thereof from the Agent;

          (d) if any representation or warranty made by a Credit Party (or
     Person acting on behalf of a Credit Party) herein or in any other
     Transaction Document shall prove to have been false, incorrect or
     misleading in any material respect on the date as of which made and uncured
     at the time discovered and shall not have been cured by the earlier of (i)
     30 days after an Executive Officer of such Credit Party obtains actual
     knowledge thereof and (ii) 30 days after receipt by such Credit Party of
     notice thereof from the Agent or a Lender;

          (e) if a Credit Party shall (i) generally not be paying its debts as
     they come due, (ii) file a petition in bankruptcy or a petition to take
     advantage of any insolvency act, (iii) become insolvent or make an
     assignment for the benefit of its creditors, (iv) consent to the
     appointment of a custodian or receiver of itself or of the whole or any
     substantial part of its property, (v) on a petition in bankruptcy filed
     against it, have an order for relief entered against it or (vi) file a
     petition or answer seeking reorganization or arrangement under the federal
     bankruptcy laws or any other applicable law;

          (f) if an involuntary petition in bankruptcy shall be filed against a
     Credit Party or any of their respective subsidiaries and not dismissed
     within 60 days from the date of the filing;

          (g) (i) any Plan shall incur an accumulated funding deficiency (as
     defined in Section 412 of the Code or Section 302 of ERISA), whether or not
     waived, or fail to make a required installment payment on or before the due
     date under Section 412 of the Code or Section 302 of ERISA, or (ii)
     Borrower, Guarantor or any ERISA Affiliate shall have engaged in a
     transaction which is prohibited under Section 4975 of the Code or Section
     406 of ERISA which could result in the imposition of liability on any of
     Borrower, Guarantor or any ERISA Affiliate and an exemption shall not be
     applicable or have been obtained under Section 408 of ERISA or Section 4975
     of the Code, or (iii) Borrower, Guarantor or any ERISA Affiliate shall fail
     to pay when due or is in default on an amount which it shall have become
     liable to pay to the PBGC, any Plan, any Multiemployer Plan or a trust
     established under Section 4049 of ERISA, or (iv) a condition shall exist by
     reason of which the PBGC would be entitled to obtain a decree adjudicating
     that an ERISA Plan must be terminated or have a trustee appointed to
     administer any ERISA Plan, or (v) a proceeding shall be instituted against
     any of Borrower, Guarantor or ERISA Affiliate to enforce Section 515 of
     ERISA, or (vi) any other event or condition shall occur or exist with
     respect to any Employee Benefit, Plan or Multiemployer Plan which could
     subject Borrower, Guarantor or any ERISA Affiliate to any tax, penalty or
     other liability or the imposition of any lien or security interest on
     Borrower, Guarantor or any ERISA Affiliate, (vii) Borrower or Guarantor
     shall incur any liability for any post-retirement or post-termination
     health or life insurance or (viii) the assets of Borrower or Guarantor
     become or are deemed to be assets of an Employee Benefit Plan. No Event of
     Default shall be deemed to be, or have been, waived or corrected because of
     any disclosure by Borrower or Guarantor;


                                      -47-



          (h) if a court of competent jurisdiction shall enter an order,
     judgment or decree appointing, without the consent of such Credit Party, a
     custodian or receiver of a Credit Party, or of the whole or any substantial
     part of its property, or approving a petition filed against such entity
     seeking reorganization or arrangement of such entity under applicable law,
     and such order, judgment or decree shall not be set aside or stayed within
     60 days from the date of its entry;

          (i) if, under the provisions of any other law for the relief or aid of
     debtors, any court of competent jurisdiction shall assume custody or
     control of a Credit Party or of the whole or any substantial part of such
     entity's property and such custody or control shall not be terminated or
     stayed within 60 days from the date of assumption of custody or control;

          (j) if a final judgment, a fine or other order for the payment of
     money in excess of $1,000,000 or the equivalent thereof in another currency
     shall be rendered by a court or administrative agency against a Credit
     Party and such entity shall not discharge the same or provide for its
     discharge in accordance with its terms, or procure a stay of execution
     thereof within 30 days from the date of its entry and within the 30-day
     period, or any longer period during which execution of such judgment, fine
     or other order shall have been stayed, appeal therefrom and cause the
     execution thereof to be stayed during the appeal;

          (k) if a Credit Party shall default (as principal or guarantor or
     other surety) in any payment of principal or interest on any obligation for
     money borrowed beyond any period of grace provided with respect thereto, or
     if any other default under any agreement under which any such obligation is
     created or under any instrument securing or evidencing such obligation,
     shall have occurred, if the effect of such other default is to cause, or
     permit the holder of such obligation to cause, such obligation to become
     due prior to its stated maturity; provided, however, in the case of any
     such obligation for money borrowed as to which any such default in any
     payment of principal or interest or any such other default has occurred, it
     shall not constitute an Event of Default under this clause (j) unless (i)
     with respect to any such obligation for borrowed money evidenced by common
     loan documents (such as a single credit agreement or a single series of
     notes), the principal amount of such obligation exceeds $1,000,000, or (ii)
     the principal amount of all such obligations for money borrowed (including,
     without limitation, any such obligations described in the immediately
     preceding clause (i)) as to which any such default then exists exceeds
     $1,000,000 in aggregate;

          (l) if an Event of Default has occurred and is continuing under a
     Security Document, or if any of the Transaction Documents shall for any
     reason other than the satisfaction in full of the Obligations cease to be,
     or be asserted by a Credit Party not to be, a legal, valid and binding
     obligation of such Credit Party, enforceable in accordance with its terms;

          (m) if a Borrower ceases to be a direct or indirect Wholly-Owned
     Subsidiary of the Guarantor without the prior written consent of the
     Requisite Lenders; or


                                      -48-



          (n) if the Credit Parties shall fail to comply with the condition
     subsequent set forth in clause (b)(xiii) of Article III of the First
     Supplement by the date set forth therein.

     Section 9.02 Waiver of Default. Any Event of Default may be waived only
with the written consent of the Requisite Lenders. Any Event of Default so
waived shall be deemed to have been cured and not to be continuing, but no such
waiver shall be deemed a continuing waiver or shall extend to or affect any
subsequent like default or impair any rights arising therefrom.

     Section 9.03 Remedies. Upon the occurrence and during the continuance of an
Event of Default, the Requisite Lenders or the Agent, on behalf and for the
ratable benefit of the Lenders, may, at the direction of the Requisite Lenders,
do any one or more of the following, all of which are hereby authorized by the
Guarantor and each of the Borrowers:

          (a) declare (i) all or any of the Notes, the Obligations of the Credit
     Parties under this Agreement, the other Transaction Documents and any other
     instrument executed by any of them pursuant to the Transaction Documents to
     be immediately due and payable and, upon such declaration, such obligations
     so declared due and payable shall immediately become due and payable;
     provided, however, that if such Event of Default is under any of Sections
     9.01(e), (f), (h) or (i), then all of the Obligations shall become
     immediately due and payable forthwith without the requirement of any notice
     or other action by the Lenders or the Agent;

          (b) terminate the rights, powers and privileges of the Credit Parties
     under the Transaction Documents (including, without limitation, declaring
     the Commitments and other lending obligations under the Transaction
     Documents, if any, terminated, whereupon the Commitments and such other
     lending obligations, if any, of each Lender shall immediately terminate);

          (c) exercise any or all of the rights and powers and pursue any and
     all of the remedies pursuant to this Article and any of the other
     Transaction Documents (including, without limitation, the Security
     Documents), available to a secured party under the UCC and all other
     rights, remedies and powers irrespective of whether the UCC applies to the
     affected Collateral) permitted by applicable law; and

          (d) bring suit at law or in equity, to collect the payments due under
     each of the Transaction Documents and to recover judgment for the
     Obligations hereby secured, and collect the same out of any and all of the
     Collateral.

     Section 9.04 Rights of Set-Off. Regardless of the adequacy of any
Collateral, during the continuance of an Event of Default, any deposits or other
sums credited by or due from any Lender to a Credit Party may be set-off against
the Obligations and any and all other liabilities, direct or indirect, absolute
or contingent, due or to become due, now existing or hereafter arising, of such
Credit Party to the Lenders. Any Lender that exercises any such set-off right
shall use reasonable diligence to notify such Credit Party of any such exercise,
provided that the failure of


                                      -49-



such Lender to provide any such notice shall not affect the validity of such
Lender's exercise of such set-off right.

     Section 9.05 Rights and Remedies Cumulative. The Lenders' and the Agent's
rights and remedies under this Agreement shall be cumulative and shall be in
addition to every other right, power and remedy herein specifically given or now
or hereafter existing at law, in admiralty, in equity or by statute, and each
and every right, power and remedy whether specifically herein given or otherwise
existing may be exercised from time to time and as often and in such order as
may be deemed expedient by the Agent or the Lenders, and the exercise or the
beginning of the exercise of any power or remedy shall not be construed to be a
waiver of the right to exercise at the same time or thereafter any other right,
power or remedy. The Lenders and the Agent shall have all other rights and
remedies not inconsistent herewith as provided by law or in equity. No exercise
by any Lender or the Agent of one right or remedy shall be deemed an election.
No delay or omission by any Lender or the Agent shall constitute a waiver,
election or acquiescence by such party.

     Section 9.06 Specific Remedies. Upon the occurrence and during the
continuance of an Event of Default or after the declaration that all of the
obligations are due and payable:

          (a) At the request of the Agent, each Credit Party shall promptly
     execute and deliver such instruments and other documents as the Agent may
     deem necessary or advisable to enable the Agent to obtain possession of all
     or any part of the Collateral to which possession the Lenders shall at the
     time be entitled hereunder. If a Credit Party shall for any reason fail to
     execute and deliver such instruments and documents after such request by
     the Agent, the Agent may obtain a judgment conferring on the Agent the
     right to such possession on behalf of the Lenders immediately and requiring
     such Credit Party to deliver such instruments and documents to the Agent,
     to the entry of which judgment such Credit Party hereby specifically
     consents.

          (b) The Agent, on behalf of the Lenders, may proceed to enforce the
     rights of the Lenders by directing payment to it of all monies payable
     under any agreement or undertaking constituting a part of the Collateral,
     by proceedings in any court of competent jurisdiction for the appointment
     of a receiver or for sale of all or any part of the Collateral possession
     to which the Lenders shall at the time be entitled hereunder or for
     foreclosure of such Collateral, and by any other action, suit, remedy or
     proceeding authorized or permitted by this Agreement or by law or by
     equity, and may file such proofs of claim and other papers or documents as
     may be necessary or advisable in order to have the claims of the Lenders
     asserted or upheld in any bankruptcy, receivership or other judicial
     proceedings.

          (c) The Agent shall be entitled to set-off against and withdraw all
     amounts constituting a part of the Collateral and to apply the same as
     follows:

          First: To the payment of all reasonable fees, expenses and/or costs,
          including, without limitation, costs, fees and/or expenses in
          connection with any taking, operating, attorney's fees and expenses,
          court costs and other expenses or advances made or incurred by the
          Agent in connection


                                      -50-



          with the ascertainment or protection of its rights and the pursuance
          of its remedies hereunder or under any of the Transaction Documents
          (including, without limitation, the reasonable fees and expenses of
          counsel);

          Second: To the payment of interest on the Notes;

          Third: To the payment of principal on the Notes;

          Fourth: To the payment of all amounts due to the Agent and the Lenders
          in respect of taxes, indemnities, costs, fees, expenses, premiums,
          purchase of liens or otherwise under the provisions hereof or under
          any of the Transaction Documents;

          Fifth: To the payment of the Obligations, other than those referred to
          in clauses First through Fourth above; and

          Sixth: To the payment of any surplus thereafter remaining to the
          Guarantor, for payment to the applicable Borrower or whomever may be
          lawfully entitled thereto.

          (d) Without limiting the foregoing, the Agent and the Lenders, their
     respective assigns and legal representatives shall have all the remedies of
     a secured party under applicable law and such further remedies as from time
     to time may hereafter be provided pursuant to such law for a secured party.
     In exercising its power of sale, the Agent shall be entitled to add to the
     Loans any and all of the Agent's or Lenders' expenses incurred in
     connection therewith.

     Section 9.07 Restoration of Rights and Remedies. In case the Agent or a
Lender shall have proceeded to enforce any right, power or remedy under this
Agreement or any other Transaction Document by foreclosure, entry or otherwise,
and such proceedings shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Agent or such Lender, then and in
every such case the Credit Parties, the Agent and the Lenders shall be restored
to their former positions and rights hereunder with respect to this Agreement,
the Transaction Documents, the Collateral, and all rights, remedies and powers
of the Agent and the Lenders shall continue as if no such proceedings had been
taken.

                                    ARTICLE X
                         RELATIONSHIP AMONG THE LENDERS

     Section 10.01 Appointment and Authorization. Each Lender hereby irrevocably
appoints, designates and authorizes GMAC CF as the Agent under this Agreement
and under each of the other Transaction Documents and irrevocably authorizes the
Agent to take such action on its behalf under the provisions of this Agreement
and each other Transaction Document and to exercise such powers and perform such
duties as are expressly delegated to it by the terms of this Agreement or any
other Transaction Document, together with such actions and powers as are
reasonably incidental thereto. The Agent is hereby expressly authorized by the
Lenders, without hereby limiting any implied authority, (a) to receive on behalf
of the Lenders all


                                      -51-



payments of principal of and interest on the Loans and all other Obligations due
to the Lenders hereunder or the other Transaction Documents, and promptly to
distribute to each Lender its pro rata share of each payment so received; (b) to
give notice on behalf of each of the Lenders to the Borrowers of any Event of
Default specified in this Agreement of which an officer of the Agent has actual
knowledge acquired in connection with its agency hereunder; (c) to act as Agent
on behalf of the Lenders under the other Transaction Documents and to exercise
all rights granted to the Agent under this Agreement and the other Transaction
Documents; and (d) to distribute to each Lender copies of all notices, financial
statements and other materials delivered by the Borrowers pursuant to this
Agreement or the other Transaction Documents as received by the Agent; provided,
however, that no duties or responsibilities herein or therein shall be implied
to have been assumed by the Agent. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Transaction Document, the
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Agent have or be deemed to have any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Transaction Document or otherwise exist against the
Agent.

     Section 10.02 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Transaction Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the gross negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care or for any action it takes
on the advice of counsel.

     Section 10.03 Liability of Agent. None of the Agent-Related Persons shall
(a) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Transaction Document (except
for its own gross negligence or willful misconduct), (b) be liable as a
consequence of any failure or delay in performance by, or any breach by, any
other Lender or any other Person, of its obligations under this Agreement or any
other Transaction Document or (c) be responsible in any manner to any Lender for
any recital, statement, representation or warranty made by a Credit Party, or
any officer thereof, contained in this Agreement or in any other Transaction
Document, or in any certificate, report, statement or other document referred to
or provided for in, or received by the Agent under or in connection with, this
Agreement or any other Transaction Document, or for the value of any Collateral
or the validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Transaction Document, or for any failure of a Credit
Party or any other party to this Agreement or any other Transaction Document to
perform its obligations hereunder or thereunder. No Agent-Related Person shall
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Transaction Document, or to inspect the
properties, books or records of any Credit Party.

     Section 10.04 Reliance by the Agent.

          (a) The Agent shall be entitled to rely, and shall be fully protected
     in relying, upon (i) any writing, resolution, notice, consent, certificate,
     affidavit, letter, telegram, facsimile, telex or telephone message,
     statement or other document or


                                      -52-



     conversation believed by it to be genuine and correct and to have been
     signed, sent or made by the proper Person or Persons, and (ii) any advice
     or statements of legal counsel (including counsel to the Borrowers or the
     Guarantor), independent accountants and other experts selected by the
     Agent. The Agent shall be fully justified in failing or refusing to take
     any action under this Agreement or any other Transaction Document unless it
     shall first receive such advice or concurrence of the Requisite Lenders as
     it deems appropriate and, if it so requests, it shall first be indemnified
     to its satisfaction by the Lenders against any and all liability and
     expense which may be incurred by it by reason of taking or continuing to
     take any such action. The Agent shall in all cases be fully protected in
     acting, or in refraining from acting, under this Agreement or any other
     Transaction Document in accordance with a request or consent of the
     Requisite Lenders and such request and any action taken or failure to act
     pursuant thereto shall be binding upon all of the Lenders.

          (b) For purposes of determining compliance with the conditions
     precedent specified in Article V, each Lender that has executed this
     Agreement or shall hereafter execute and deliver an Assignment and
     Acceptance in accordance with Section 10.11 shall be deemed to have
     consented to, approved or accepted or to be satisfied with each document or
     other matter either sent by the Agent to such Lender for consent, approval,
     acceptance or satisfaction, or required thereunder to be consented to or
     approved by or acceptable or satisfactory to the Lender, unless an officer
     of the Agent responsible for the transactions contemplated by the
     Transaction Documents shall have received notice from the Lender prior to
     the borrowing specifying its objection thereto and either such objection
     shall not have been withdrawn by notice to the Agent to that effect or the
     Lender shall not have made available to the Agent the Lender's
     Proportionate Share of such borrowing.

     Section 10.05 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of any Reduction Amount, interest and
fees required to be paid to the Agent on behalf and for the benefit of the
Lenders, unless the Agent shall have received written notice from a Lender or a
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Agent receives such a notice, the Agent shall give notice thereof to the
Lenders. The Agent shall take such action with respect to such Default or Event
of Default as shall be requested by the Requisite Lenders in accordance with
this Agreement; provided, however, that unless and until the Agent shall have
received any such request, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable or in the best commercial interest
of the Lenders.

     Section 10.06 Credit Decision. Each Lender expressly acknowledges that none
of the Agent-Related Persons has made any representation or warranty to it and
that no act by the Agent hereinafter taken, including any review of the affairs
of a Credit Party, shall be deemed to constitute any representation or warranty
by the Agent to any Lender. Each Lender represents to the Agent that it has,
independently and without reliance upon the Agent and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and


                                      -53-



creditworthiness of the Credit Parties, and all applicable Lender regulatory
laws relating to the transactions contemplated thereby, and made its own
decision to enter into this Agreement and extend credit to the Borrowers under
and pursuant to this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Agent and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Transaction Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrowers. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the Agent,
the Agent shall not have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of the Borrowers,
which may come into the possession of any of the Agent-Related Persons.

     Section 10.07 Indemnification. Whether or not the transactions contemplated
hereby shall be consummated, the Borrowers and the Guarantor, jointly and
severally, shall indemnify upon demand the Agent-Related Persons (to the extent
not reimbursed by or on behalf of the Credit Parties and without limiting the
obligation of the Credit Parties to do so), ratably from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind whatsoever which may at any time
(including at any time following the repayment of the Notes and the termination
or resignation of the related Agent) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this Agreement,
the Transaction Documents or any document contemplated by or referred to herein
or therein or the transactions contemplated hereby or thereby or any action
taken or omitted by any such Person under or in connection with any of the
foregoing; provided, however, that no Lender or Borrower shall be liable for the
payment to the Agent-Related Persons of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent-Related Person's gross
negligence or willful misconduct. Without limiting the foregoing, each Lender
shall reimburse the Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including reasonable attorney fees) incurred by the
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under this Agreement, any other Transaction Document, or any
document contemplated by or referred to herein to the extent that the Agent is
not reimbursed for such expenses by or on behalf of a Credit Party. The
obligation of the Lenders and the Borrowers in this Section 10.07 shall survive
the payment of the Obligations. If, and to the extent that the obligations under
this Article X are unenforceable for any reason, the Borrowers hereby agree to
make the maximum contribution to the payment in satisfaction of such obligations
which is permissible under applicable law.

     Section 10.08 Agent in Individual Capacity. GMAC CF and its affiliates may
make loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory or other business with the Guarantor, a Borrower and/or any
of their respective affiliates as though GMAC CF were not the Agent hereunder
and without notice to or consent of the Lenders. With respect to its
Proportionate Share, GMAC CF shall have the same rights and powers under this
Agreement as


                                      -54-



any other Lender and may exercise the same as though it were not the Agent, and
the terms "Lender" and "Lenders" shall include GMAC CF in its individual
capacity.

     Section 10.09 Successor Agent. Subject to the appointment and acceptance of
a successor Agent as provided below, (i) the Agent may resign upon thirty (30)
days' notice to the Lenders and the Borrowers and (ii) the Agent, at the request
of the Requisite Lenders shall resign. If the Agent shall resign as Agent under
this Agreement, the Requisite Lenders shall appoint from among the Lenders a
successor agent for the Lenders. If no successor agent is appointed prior to the
effective date of the resignation of the Agent, the Agent may appoint, after
consulting with the Lenders and the Borrowers, a successor agent from among the
Lenders. Upon the acceptance of its appointment as successor agent hereunder,
such successor agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term "Agent" shall mean such successor agent and the
retiring Agent's appointment, powers and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article X shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement. The covenants contained
in this Article X shall survive the payment or satisfaction in full of all other
obligations. If no successor agent has accepted appointment as Agent by the date
which is thirty (30) days following a retiring Agent's notice of resignation or
the Requisite Lenders shall have requested the resignation of such Agent, then
(i) the retiring Agent may, on behalf of the Lenders and the Borrowers, appoint
a successor Agent, if such Agent shall have resigned by notifying the Lenders,
or (ii) otherwise, the Requisite Lenders may petition a court of competent
jurisdiction to replace the terminated Agent, in each case (except as waived by
the Requisite Lenders) which successor shall be a bank with an office in New
York, New York, having a combined capital and surplus of at least $500,000,000
or an Affiliate of any such bank. Any successor Agent appointed under this
Section 10.09 shall be reasonably acceptable to Borrower. The retiring Agent
shall execute and deliver any and all instruments or documents necessary or
advisable to transfer its rights, powers, privileges and duties hereunder and
under the other Transaction Documents and to maintain the perfection and
priority of all security interests granted under the Transaction Documents.

     Section 10.10 Collateral Matters.

          (a) The Agent is authorized on behalf of all the Lenders, without the
     necessity of any notice to or further consent from the Lenders, from time
     to time to take any action with respect to the Collateral which may be
     necessary to perfect and maintain perfected the security interest in and
     Liens upon the Collateral granted pursuant thereto,

          (b) The Lenders irrevocably authorize the Agent, at its option and in
     its discretion, to release any Lien granted to or held by the Agent upon
     any Collateral (i) upon payment in full of all of the Notes and all other
     Obligations then payable under this Agreement and under any other
     Transaction Document; (ii) consisting of an instrument evidencing
     Indebtedness or other debt instrument, if the indebtedness evidenced
     thereby has been paid in full; (iii) if approved, authorized or ratified in
     writing by all of the Lenders or (iv) upon any sale, transfer, assignment
     or other disposition of any Collateral, to the extent that the same is
     expressly permitted by the terms of this Agreement and the other
     Transaction Documents. Upon request by the Agent at any time, the Lenders
     will


                                      -55-



     confirm in writing the Agent's authority to release particular types or
     items of Collateral pursuant to this Section 10.10(b).

     Section 10.11 Assignments, Participations, Etc.

          (a) Any Lender may at any time assign and delegate to one or more
     Eligible Lender (each an "Assignee") all, or any ratable part of all, of
     the Notes and the other interests, rights and obligations of such Lender
     hereunder. In the event of a partial assignment (other than to another
     Lender or an Affiliate of a Lender), such assignment shall be in a minimum
     amount of not less than $1,000,000 or such Lender's entire Proportionate
     Share, in each case, unless otherwise agreed in writing by the Borrowers
     and the Agent; provided, however, that the Borrowers and the Agent may
     continue to deal solely and directly with such Lender in connection with
     the interest so assigned to an Assignee until (i) five (5) Business Days'
     prior written notice of such assignment, together with payment
     instructions, addresses and related information with respect to the
     Assignee, shall have been given to the Borrowers and the Agent by such
     Lender and the Assignee; (ii) such Lender and its Assignee shall have
     delivered to the Borrowers and the Agent an Assignment and Acceptance in
     the form of Exhibit H ("Assignment and Acceptance"), for acceptance and for
     recording by the Agent in the Register, together with any Note subject to
     such assignment; (iii) the assignor Lender or the Assignee has paid to the
     Agent a processing fee in the amount of $4,000, and (iv) the parties to
     each such assignment shall have agreed to reimburse the Agent for all fees,
     costs and expenses (including, without limitation, the reasonable fees and
     out-of-pocket expenses of counsel for the Agent) incurred by the Agent in
     connection with such assignment.

          (b) From and after the date that the Agent notifies the assigning
     Lender that it has received an executed Assignment and Acceptance and
     payment of the above-referenced processing fee, (i) the Assignee
     thereunder shall be a party hereto and, to the extent that rights and
     obligations hereunder have been assigned to it pursuant to such Assignment
     and Acceptance, shall have the rights and obligations of a Lender under the
     Transaction Documents, and (ii) the assignor Lender shall, to the extent
     that rights and obligations hereunder and under the other Transaction
     Documents have been assigned by it pursuant to such Assignment and
     Acceptance, relinquish its rights and be released from its obligations
     under the Transaction Documents (and, in the case of an Assignment and
     Acceptance covering all or the remaining portion of an assigning Lender's
     rights and obligations under this Agreement, such Lender shall cease to be
     a party hereto (but shall continue to be entitled to any Interest and other
     Obligations accrued for its account hereunder, not so assigned and not yet
     paid)).

          (c) Within five (5) Business Days after its receipt of notice by the
     Agent that it has received an executed Assignment and Acceptance and
     payment of the processing fee, the Borrowers shall execute and deliver to
     the Agent, a new Note evidencing such Assignee's assigned Proportionate
     Share of the related Loans and, if the assignor Lender has retained a
     portion thereof, a replacement Note in the principal amount of the
     Proportionate Share of the Loans retained by the assignor Lender (such Note
     to be in exchange for, but not in payment of, the Note held by such
     Lender). Immediately upon each Assignee's making its processing fee payment
     under the


                                      -56-



     Assignment and Acceptance, this Agreement shall be deemed to be amended to
     the extent, but only to the extent, necessary to reflect the addition of
     the Assignee and the adjustment of the Proportionate Share of the Loans.

          (d) By executing and delivering an Assignment and Acceptance, the
     assigning Lender thereunder and the Assignee thereunder shall be deemed to
     confirm to and agree with each other and the other parties hereto as
     follows: (i) such assignor Lender warrants that it is the legal and
     beneficial owner of the interest being assigned thereby free and clear of
     any adverse claim and that the outstanding balances of its Loan, without
     giving effect to assignments thereof which have not become effective, are
     as set forth in such Assignment and Acceptance, (ii) except as set forth in
     (i) above, such assignor Lender makes no representation or warranty and
     assumes no responsibility with respect to any statements, warranties or
     representations made in or in connection with this Agreement, or the
     execution, legality, validity, enforceability, genuineness, sufficiency or
     value of this Agreement, any other Transaction Document or any other
     instrument or document furnished pursuant hereto or the financial condition
     of any Credit Party or the performance or observance by any Credit Party of
     any of its obligations under this Agreement, any other Transaction Document
     or any other instrument or document furnished pursuant hereto; (iii) such
     Assignee represents and warrants that it is legally authorized to enter
     into such Assignment and Acceptance; (iv) such Assignee confirms that it
     has received a copy of this Agreement, together with copies of the most
     recent financial statements delivered pursuant to Section 6.07 and such
     other documents and information as it has deemed appropriate to make its
     own credit analysis and decision to enter into such Assignment and
     Acceptance; (v) such Assignee will independently and without reliance upon
     the Agent, such assignor Lender or any other Lender and based on such
     documents and information as it shall deem appropriate at the time,
     continue to make its own credit decisions in taking or not taking action
     under this Agreement; (vi) such Assignee appoints and authorizes the Agent
     to take such action as agent on its behalf and to exercise such powers
     under this Agreement as are delegated to the Agent by the terms hereof,
     together with such powers as are reasonably incidental thereto; and (vii)
     such Assignee agrees that it will perform in accordance with their terms
     all the obligations which by the terms of this Agreement are required to be
     performed by it as a Lender.

          (e) Any Lender may at any time sell to one or more commercial banks or
     other Persons not affiliates of a Credit Party (a "Participant")
     participating interests in the Loans and the other interests of that Lender
     (the "Originating Lender") hereunder and under the other Transaction
     Documents; provided, however, that (i) the Originating Lender's obligations
     under this Agreement shall remain unchanged, (ii) the Originating Lender
     shall remain solely responsible for the performance of such obligations,
     (iii) the Credit Parties and the Agent shall continue to deal solely and
     directly with the Originating Lender in connection with the Originating
     Lender's rights and obligations under this Agreement and the other
     Transaction Documents, (iv) such Participant shall be entitled to the
     benefit of the provisions contained in Section 2.13 limited, as to each
     Participant, to the amount the selling Lender could claim and (v) no Lender
     shall transfer or grant any participating interest under which the
     Participant shall have rights to approve any amendment to, or any consent
     or waiver with respect to, this Agreement or any other


                                      -57-



     Transaction Documents other than those that pursuant to the terms of this
     Agreement require the consent of the affected Lender.

          (f) Each Lender agrees to maintain the confidentiality of all
     information identified as "confidential" by the Borrowers and provided to
     it by the Borrowers, or by the Agent on the behalf of the Borrowers, in
     connection with this Agreement or any other Transaction Document, and
     neither it nor any of its Affiliates shall use any such information for any
     purpose or in any manner other than pursuant to the terms contemplated by
     this Agreement; except to the extent such information (i) was or becomes
     generally available to the public other than as a result of a disclosure by
     the Lender, or (ii) was or becomes available on a non-confidential basis
     from a source other than a Credit Party or one of its affiliates; provided,
     however, that any Lender may disclose such information (A) at the request
     or pursuant to any requirement of any Governmental Authority to which the
     Lender is subject or in connection with an examination of such Lender by
     any such authority; (B) pursuant to subpoena or other court process; (C)
     when required to do so in accordance with the provisions of any applicable
     law or requirement of law; and (D) to such Lender's independent auditors
     and other professional advisors. Notwithstanding the foregoing, each
     Borrower authorizes each Lender to disclose to any Participant or Assignee
     and to any prospective Participant or Assignee, such financial and other
     information in such Lender's possession concerning a Borrower or the
     Guarantor which has been delivered to the Agent or the Lenders pursuant to
     this Agreement or which has been delivered to the Agent or the Lenders by a
     Borrower or the Guarantor in connection with the Lenders' credit evaluation
     of a Borrower and/or the Guarantor prior to entering into this Agreement,
     provided that such participant or assignee (or prospective participant or
     assignee) agrees in writing to be bound by a confidentiality agreement
     similar to the provisions of this Section 10.11(e).

          (g) Notwithstanding any other provision contained in this Agreement or
     any other Transaction Document to the contrary, any Lender may assign all
     or any portion of its Proportionate Share of the Notes held by it to any
     Federal Reserve Bank or the United States Treasury as collateral security
     pursuant to Regulation A of the Board of Governors of the Federal Reserve
     System and any Operating Circular issued by such Federal Reserve Bank,
     provided that each such assignment shall be made in accordance with
     applicable law and no such assignment shall release a Lender from any of
     its obligations hereunder.

     Section 10.12 Other Matters Pertaining to the Agent.

          (a) The relationship between the Agent and each of the Lenders is that
     of an independent contractor. The use of the term "Agent" is for
     convenience only and is used to describe, as a form of convention, the
     independent contractual relationship between the Agent and each of the
     Lenders. Nothing contained in this Credit Agreement nor the other
     Transaction Documents shall be construed to create an agency, trust or
     other fiduciary relationship between the Agent and any of the Lenders.

          (b) As an independent contractor empowered by the responsibilities
     hereunder and under the Transaction Documents, the Agent is nevertheless a


                                      -58-



     "representative" of the Lenders, as that term is defined in Article 1 of
     the UCC, for purposes of actions for the benefit of the Lenders and with
     respect to all collateral security and guaranties contemplated by the
     Transaction Documents. Such actions include the designation of the Agent as
     "secured party," "mortgagee" or the like on all financing statements and
     other documents and instruments, whether recorded or otherwise, relating to
     the attachment, perfection, or deeds of trust in collateral security
     intended to secure the payment or performance of any of the Obligations,
     all for the benefit of the Lenders and the Agent.

          (c) If a court of competent jurisdiction shall adjudge that any amount
     received and distributed by the Agent is to be repaid, each Person to whom
     any such distribution shall have been made shall either repay to such Agent
     its proportionate share of the amount so adjudged to be repaid or shall pay
     over the same in such manner and to such Persons as shall be determined by
     such court.

          (d) Any and all rights granted to the Agent under this Agreement or
     any other Transaction Document are to be held and exercised by the Agent as
     administrative agent for the benefit of the Lenders pursuant to the
     provisions of this Agreement.

                                   ARTICLE XI
                                  MISCELLANEOUS

     Section 11.01 Notices.

          (a) All notices, requests, approvals and other communications provided
     for hereunder shall be in writing (including, unless the context expressly
     otherwise provides, by facsimile transmission, provided that any matter
     transmitted by a Borrower or the Guarantor by facsimile (i) shall be
     immediately confirmed by a telephone call to the recipient at the number
     set forth in paragraph (d) hereof, and (ii) shall be followed promptly by a
     hard copy original thereof) and faxed, sent for overnight (next day)
     delivery or delivered, to the address or facsimile number specified for
     notices in paragraph (d) of this Section 11.01 or, as directed to the
     Borrowers, the Guarantor or the Agent, to such other address as shall be
     designated by such party in a written notice to the other parties, and as
     directed to each other party, at such other address as shall be designated
     by such party in a written notice to the Borrowers, the Guarantor and the
     Agent.

          (b) All such notices, requests and communications shall, when
     transmitted by overnight delivery, or faxed, be effective when delivered
     for overnight (next day) delivery, or transmitted by facsimile machine and
     confirmed by telephone, respectively, or if delivered, upon delivery,
     except that notices delivered to the Agent pursuant to Articles II, V, VI
     and IX shall not be effective until actually received by the Agent.

          (c) Each of the Guarantor and each Borrower acknowledge and agree that
     any agreement of the Agent and the Lenders to receive certain notices by
     telephone and facsimile is solely for the convenience and at the request of
     such Person. The Agent and the Lenders shall be entitled to rely on the
     authority of any Person purporting to be a


                                      -59-



     Person authorized by such Borrower or the Guarantor to give such notice and
     the Agent and the Lenders shall not have any liability to any Borrower or
     the Guarantor or other Person on account of any action taken or not taken
     by the Agent or the Lenders in reliance upon such telephonic or facsimile
     notice. The obligation of the Guarantor and the Borrowers to repay the
     Obligations shall not be affected in any way or to any extent by any
     failure by the Agent and the Lenders to receive written confirmation of any
     telephonic or facsimile notice or the receipt by the Agent and the Lenders
     of a confirmation which is at variance with the terms understood by the
     Agent and the Lenders to be contained in the telephonic or facsimile
     notice.

          (d) All notices hereunder or under any other Transaction Document
     (unless otherwise specified in writing to the Agent and the other parties
     hereto) shall be sent to the following contact information:




----------------------------------------------------------------------------------------
IF TO THE AGENT OR GMAC
CF, AS LENDER, TO:              IF TO A CREDIT PARTY, TO:
----------------------------------------------------------------------------------------

210 Interstate North Parkway,   Address:                     with a copy to:
Suite 315
Atlanta, Georgia 30339 USA      Suite 306                    TBS Shipping Services Inc.
Attention: General Counsel      Commerce Building            612 East Grassy Sprain Road
Telephone: (678) 553-2700       One Chancery Lane            Yonkers, NY 10710 USA
Fax: (678) 553-2707             Hamilton HM 12
                                Bermuda                      Attention: Ferdinand Lepere
                                                             Telephone: (914) 961-1000
                                Mailing Address:             Fax:(914) 961-5121

                                P.O. Box HM 2522                        and
                                Hamilton HMGX
                                Bermuda                      Cardillo & Corbett
                                                             29 Broadway
                                Attention: William J. Carr   New York, NY 10006 USA
                                Telephone: 1441 295 9230
                                Fax: 1441 295 4957           Attention: Tulio R. Prieto
                                                             Telephone: (212) 344-0464
                                                             Fax: (212) 797-1212
----------------------------------------------------------------------------------------



     Section 11.02 Survival of Agreement. All covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the making of the Loans and the execution and
delivery of the Notes and shall continue in full force and effect so long as the
Obligations remain outstanding; provided that any indemnity or reimbursement
obligations of a Borrower or the Guarantor under this Agreement shall survive
any termination of this Agreement.

     Section 11.03 Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York, without giving
effect to the principles of conflicts of law (except for Section 5-1401 and
Section 5-1402 of the New York General Obligations Law).


                                      -60-



     Section 11.04 Modification of Agreement.

          (a) No amendment, modification or waiver of any provision of this
     Agreement or any other Transaction Document, and no consent with respect to
     any departure by the Guarantor or any Borrower therefrom, shall be
     effective unless the same shall be in writing and signed by the Requisite
     Lenders and acknowledged by the Agent, and then such waiver shall be
     effective only in the specific instance and for the specific purpose for
     which given; provided, however, that no such waiver, amendment, or consent
     shall, unless in writing and signed by each Lender affected thereby and
     acknowledged by the Agent, do any of the following:

          (i)  increase or extend the Commitment or Proportionate Share of any
               Lender, decrease the Applicable Margin, change the Aggregate Loan
               Commitment (other than as provided in Article II) or subject any
               Lender to any additional obligations;

          (ii) postpone or delay any date fixed for any payment of principal,
               interest, fees or other Obligations due to the Lenders (or any of
               them) hereunder or under any Transaction Document;

          (iii) reduce the principal of, or the rate of interest specified
               herein on any Loan, or of any fees or other Obligations payable
               hereunder or under any Transaction Document;

          (iv) amend this Section 11.04;

          (v)  amend Section 2.09 or any other provision with respect to pro
               rata payments or sharing of recoveries among the Lenders;

and, provided further that no amendment, modification, waiver or consent shall,
unless in writing and signed by the Agent in addition to the Requisite Lenders
or all the Lenders, as the case may be, affect the rights or duties of the Agent
under this Agreement or any other Transaction Document.

          (b) Reserved.

          (c) Each Credit Party hereby agrees that the Lenders may require the
     Credit Parties to jointly and severally pay a fee in connection with any
     waiver, amendment, supplement or other modification to this Agreement or
     any other Transaction Document, which may be granted by the Agent and the
     Lenders in their sole discretion. The Credit Parties agree that the amount
     of such fee in each instance shall be not less than 0.05% of the then
     outstanding principal balance of the Loans.

     Section 11.05 Costs and Expenses. The Guarantor and the Borrowers agree,
whether or not the transactions contemplated hereby shall be consummated, to:

          (a) pay or reimburse the Agent within five (5) Business Days after
     demand for all costs, fees and/or expenses incurred by the Agent,
     including, without limitation,


                                      -61-



     any and all costs, fees and/or expenses in connection with the evaluation,
     development, preparation, negotiation, delivery, administration, execution
     of, and any amendment, supplement, waiver or modification to (in each case,
     whether or not consummated), this Agreement, any other Transaction Document
     and any other documents prepared in connection herewith (including any
     commitment letter and related documents preceding this Agreement) or
     therewith, and the consummation of the transactions contemplated hereby and
     thereby, including, in the case of any of the foregoing, attorney fees and
     expenses incurred by the Agent with respect hereto and thereto;

          (b) pay or reimburse the Agent and each Lender within five (5)
     Business Days after demand for all costs, fees and/or expenses incurred by
     the Agent and/or a Lender in connection with the enforcement, attempted
     enforcement, or preservation of any rights or remedies (including in
     connection with any "workout" or restructuring regarding the Loans, and
     including in any insolvency proceedings or appellate proceeding) under this
     Agreement, any other Transaction Document, and any such other documents,
     including attorney fees and expenses incurred by the Agent and/or any
     Lender; and

          (c) pay or reimburse the Agent within five (5) Business Days after
     demand for all reasonable audit, environmental inspection and review,
     search and filing, registration and recording costs, fees and/or expenses,
     incurred or sustained in connection with the matters referred to under
     Section ll.05(a) and Section 11.05(b).

     Section 11.06 Waivers. No waiver of any of the provisions of this Agreement
(a) shall be valid unless evidenced by a writing executed by each party to be
bound thereby, (b) shall be deemed or shall constitute a waiver of any other
provision of this Agreement or any other provisions hereof (whether or not
similar), or (c) shall constitute a continuing waiver unless otherwise expressly
provided. No delay on the part of the Agent or any Lender in exercising any
right or remedy hereunder shall operate as a waiver thereof nor shall any single
or partial exercise of any power or right or remedy preclude other or further
exercise thereof or the exercise of any other right or remedy. No notice to or
demand on any Borrower or the Guarantor in any case shall entitle it to any
other or further notice or demand in the same or similar circumstances.

     Section 11.07 Indemnification. To the fullest extent permitted by law, each
Credit Party, jointly and severally, agrees to protect, indemnify, defend and
hold harmless each Indemnified Party from and against any and all liabilities,
losses, obligations, damages, penalties, disbursements, expenses or costs of any
kind or nature and from any suits, judgments, actions, claims or demands
(including in respect of or for attorney costs and other fees and other
disbursements of counsel for and consultants of any Indemnified Party in
connection with any investigative, administrative or judicial proceeding,
whether or not such Indemnified Party shall be designated a party thereto) based
on any federal, state, local or foreign law or statute, rule or regulation,
(including, without limitation, securities, environmental and commercial laws)
or which arises under common law or at equitable cause or on contract or
otherwise on account of or in connection with any matter or thing or any action
or failure to act by the Indemnified Parties, or any of them, arising out of or
relating to the Transaction Documents or any agreement or instrument
contemplated by or executed pursuant to or in connection with the Transaction


                                      -62-



Documents (including, without limitation, any Environmental Claim or any claim
arising from noncompliance by a Credit Party with Sections 4.12, 4.28, 6.06 or
7.11 hereof), but excluding those arising (x) with respect to an Indemnified
Party, by reason of gross negligence or willful misconduct of such Indemnified
Party or (y) in respect of Taxes (as to which indemnification shall be
applicable only as and to the extent set forth in Section 2.13). Upon receiving
knowledge of any suit, claim or demand asserted by any Person that an
Indemnified Party believes is covered by this indemnity, such Indemnified Party
shall give each Credit Party notice thereof and an opportunity to defend it, at
the sole cost and expense of the Borrowers and the Guarantor, with legal counsel
satisfactory to such Indemnified Party. Such Indemnified Party may also require
each Credit Party to defend the matter. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in this Section 11.07 may be
unenforceable because it violates any law or public policy, each Credit Party
shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable law to the payment and satisfaction of its obligations set
forth in this Section 11.07. The obligations of each Credit Party under this
Section 11.07 shall survive the payment and performance of the Obligations and
the termination of this Agreement.

     Section 11.08 Separability of Provisions; Obligations Several. (a) If any
provision of this Agreement or any other Transaction Document should be deemed
invalid under any applicable law, such provision shall be void and of no effect
and shall cease to be a part of this Agreement or other Transaction Document
without affecting the remaining provisions, which shall remain in full force and
effect.

          (b) In the event that this Agreement, the Notes, any Transaction
     Document or any of the documents or instruments which may from time to time
     be delivered hereunder or thereunder or any provision hereof or thereof
     shall be deemed invalidated by present or future law of any Governmental
     Authority of competent jurisdiction and binding authority, or if any third
     party shall fail or refuse to recognize any of the powers granted to the
     Agent hereunder when it is sought to exercise them, this shall not affect
     the validity and/or enforceability of all or any other parts of this
     Agreement, the Notes, any Transaction Document or such documents or
     instruments and, in any such case, the Credit Parties covenant and agree
     that, on demand, they will execute and deliver such other and further
     agreements and/or documents and/or instruments and do such things as the
     Agent in its sole discretion may deem to be necessary or advisable to carry
     out the true intent of this Agreement and of the obligations secured
     hereby.

     Section 11.09 Counterparts. This Agreement and any amendment, waivers,
consents or supplements hereto may be executed in several counterparts, any by
different parties hereto in different counterparts, each of which when so
executed shall constitute an original, but all of which, when taken together,
shall constitute but one Agreement.

     Section 11.10 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof and
supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, of the parties, and there
are no warranties, representations or other agreements between the parties in
connection with the subject matter hereof except as specifically set forth or
incorporated herein. Notwithstanding the foregoing, it is acknowledged that this
Agreement


                                      -63-



may, when executed by the Credit Parties, contemplate that further details are
to be inserted. Notwithstanding that such details have not been inserted, it is
the intention of the parties that the agreement should become binding when
executed by the parties hereto. The Credit Parties hereby authorize the Agent to
insert into any of the Transaction Documents: (a) the date such document was
executed, being the date of execution of the document by the parties thereto;
(b) any other factual date; (c) any notice provision details; and (d) any other
details of a similar nature, in relation to which such information is missing or
incomplete following execution by the parties thereto.

     Section 11.11 Headings. Section and paragraph headings and the table of
contents are not to be considered part of this Agreement, are included solely
for convenience and are not intended to be full or accurate descriptions of the
contents thereof. Sections and paragraphs mentioned by number only are the
respective sections and paragraphs of this Agreement. The use of the terms
"herein", "hereunder", "hereof", and like terms shall be deemed to refer to this
entire Agreement and not merely to the particular provision in which the term is
contained, unless the context clearly indicates otherwise.

     Section 11.12 Successors and Assigns. All Persons shall be deemed to
include the successors or assigns thereof. All of the terms and provisions of
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective transferees, legal representatives, heirs,
successors and assigns; provided, however, that (a) no Credit Party may assign
any of its rights or obligations hereunder or under any other Transaction
Document without the prior written consent of the Agent and each Lender and (b)
the Lenders may assign their respective rights and obligations hereunder only in
accordance with Section 10.11 hereof.

     Section 11.13 Gender and Number. Words importing a particular gender mean
and include every other gender and words importing the singular number mean and
include the plural number and vice-versa.

     Section 11.14 Exhibits. Exhibits to this Agreement are an integral part of
this Agreement.

     Section 11.15 Notification of Addresses, Lending Offices, Etc. Each Lender
shall notify the Agent in writing of any changes in the address to which notices
to the Lender should be directed, of addresses of its Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.

     Section 11.16 No Third Parties Benefited. This Agreement is made and
entered into for the sole protection and legal benefit of the Guarantor, each
Borrower, the Lenders, the Agent, and their permitted successors and assigns,
and no other Person shall be a direct or indirect legal beneficiary of, or have
any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Transaction Documents. Neither the Agent nor any
Lender shall have any obligation to any Person not a party to this Agreement or
other Transaction Documents.

     Section 11.17 Equitable Relief. The Guarantor and the Borrowers recognize
that, in the event it fails to perform, observe or discharge any of its
obligations or liabilities under this


                                      -64-



Agreement, the Notes or any of the other Transaction Documents, any remedy at
law may prove to be inadequate relief to the Lenders or the Agent; therefore,
each of the Guarantor and each Borrower agrees that the Lenders or the Agent, if
the Lenders so request, shall be entitled to temporary and permanent injunctive
relief in any such case without the necessity of proving actual damages.

     Section 11.18 Notice of Claims; Claims Bar. THE GUARANTOR AND EACH BORROWER
HEREBY AGREES THAT IT SHALL GIVE PROMPT NOTICE OF ANY CLAIM OR CAUSE OF ACTION
IT BELIEVES IT HAS, OR MAY SEEK TO ASSERT OR ALLEGE AGAINST ANY LENDER OR THE
AGENT, WHICH SUCH CLAIM IS BASED IN LAW OR EQUITY OR ADMIRALTY, ARISING UNDER OR
RELATED TO THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER TRANSACTION DOCUMENTS
OR TO THE LOANS OR GUARANTOR'S OBLIGATIONS (OR THE COLLATERAL THEREFOR)
CONTEMPLATED HEREBY OR THEREBY OR ANY ACT OR OMISSION TO ACT BY ANY LENDER OR
THE AGENT WITH RESPECT HERETO OR THERETO, AND THAT IF IT SHALL FAIL TO GIVE SUCH
PROMPT NOTICE TO THE AGENT WITH REGARD TO ANY SUCH CLAIM OR CAUSE OF ACTION, IT
SHALL BE DEEMED TO HAVE WAIVED, AND SHALL BE FOREVER BARRED FROM BRINGING OR
ASSERTING SUCH CLAIM OR CAUSE OF ACTION IN ANY SUIT, ACTION OR PROCEEDING IN ANY
COURT OR BEFORE ANY GOVERNMENTAL AGENCY.

     Section 11.19 Waiver of Punitive Damages. NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED IN THIS AGREEMENT, THE GUARANTOR AND EACH BORROWER HEREBY
AGREE THAT IT SHALL NOT SEEK FROM ANY OTHER PARTY HERETO, UNDER ANY THEORY OF
LIABILITY, INCLUDING, WITHOUT LIMITATION, ANY THEORY IN TORTS, ANY SPECIAL,
INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES.

     Section 11.20 Consent to Jurisdiction. Any legal suit, action or proceeding
against a Credit Party arising out of or relating to this Agreement or any other
Transaction Document, or any transaction contemplated hereby or thereby, may be
instituted in any federal or state court of competent jurisdiction in New York,
New York and each Credit Party hereby irrevocably submits to the jurisdiction of
any such court in any such suit, action or proceeding. Each Credit Party hereby
waives, to the fullest extent permitted by applicable law, any defense which it
may now or hereafter have based upon lack of personal jurisdiction or venue or
forum non conveniens. Each Credit Party hereby irrevocably appoints and
designates Cardillo & Corbett, having an address at 29 Broadway, New York, New
York 10006, as its true and lawful attorney-in-fact and duly authorized agent
for the limited purpose of accepting service of legal process and each Credit
Party agrees that service of process upon such party shall constitute personal
service of such process such Credit Party. Each Credit Party shall maintain the
designation and appointment of such authorized agent until all Obligations shall
have been paid in full. If such agent shall cease to so act, the Credit Parties
shall immediately designate and appoint another such agent satisfactory to the
Agent and shall promptly deliver to the Agent evidence in writing of such other
agent's acceptance of such appointment.

     Section 11.21 Waiver of Jury Trial. THE GUARANTOR, EACH BORROWER, EACH
LENDER AND THE AGENT HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE


                                      -65-



RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE
OTHER TRANSACTION DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER,
OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.

     Section 11.22 Currency Indemnity. All payments to be made by a Borrower or
the Guarantor hereunder shall be made in United States Dollars. To the extent
that any payment or payments made to or for the account of the Agent or any
Lender in a currency other than the currency in which such payment is required
to be made hereunder or under any other Transaction Document (the "Required
Currency") for any reason (pursuant to a judgment or order of a court or
tribunal of any jurisdiction) shall only constitute a discharge to such Borrower
or the Guarantor to the extent of the amount of the Required Currency which the
Agent or such Lender is, acting in good faith and exercising reasonable and
customary diligence, able to purchase in New York, New York with the amount or
amounts so received on the date or dates of receipt by the Agent or such Lender
of such payment or payments (or if such date is not a Business Day on the next
succeeding Business Day). If the amount of the Required Currency which the Agent
or such Lender is so able to purchase falls short of the amount of the Required
Currency due to the Agent or such Lender, the Credit Parties, jointly and
severally, shall indemnify and hold the Agent or such Lender harmless (on an
after tax basis) from and against any loss or damage arising as a result. This
indemnity shall constitute a separate and independent obligation from the other
obligations contained in this Agreement, shall give rise to an independent cause
or causes of action, shall apply irrespective of any indulgence granted by the
Agent or such Lender from time to time and shall continue in full force and
effect notwithstanding any judgment or order for a liquidated sum or sums in
respect of the amount due hereunder or under any such judgment or order. The
obligations of each Credit Party under this Section 11.22 shall survive the
payment and performance of the Obligations and the termination of this
Agreement.

     Section 11.23 Release of Lien. In the event that the Guarantor or a
Borrower sells, leases, transfers, assigns or otherwise disposes of a Vessel in
accordance with Section 7.03, the Agent shall execute and file such instruments
and take such actions, at the expense of the Credit Parties, jointly and
severally, as may be reasonably requested to release such Vessel and the related
collateral from the Lien securing the Obligations.

     Section 11.24 Patriot Act. Each Lender hereby notifies the Guarantor and
each Borrower that pursuant to the requirements of the USA Patriot Act (Title
III of Pub. L. 107-56 (signed into law on October 26, 2001)) (the "USA Patriot
Act"), it is required to obtain, verify and record information that identifies
each Borrower and the Guarantor, which information includes the name and address
of each Borrower and the Guarantor and other information that will allow such
Lender to identify each Borrower and the Guarantor in accordance with the USA
Patriot Act.

     Section 11.25 TIME OF THE ESSENCE. TIME SHALL BE OF THE ESSENCE FOR THE
CLOSING OF THIS AGREEMENT AND EACH OF THE OTHER TRANSACTION DOCUMENTS AND THE
FUNDING OF THE INITIAL LOANS. THE CLOSING OF THIS AGREEMENT AND THE OTHER
TRANSACTION DOCUMENTS


                                      -66-



AND THE FUNDING OF THE FIRST ADDITIONAL LOAN SHALL OCCUR NO LATER THAN
FEBRUARY 28, 2005.

     Section 11.26 Obligations Joint and Several. Each Borrower hereby agrees
that it is jointly and severally liable for the Obligations hereunder and under
each of the other Transaction Documents. Each Borrower accepts joint and several
liability for all Obligations hereunder in consideration of the financial
accommodation to be provided by the Lenders to the Borrowers under this
Agreement, and in turn, each Borrower to the other Borrowers, for the mutual
benefit, directly and indirectly, of each other Borrower and in consideration of
the undertakings by the other Borrowers to accept joint and several liability
for the Obligations.

     Each Borrower hereby irrevocably and unconditionally accepts, not merely as
a surety but also as a co-debtor, joint and several liability with the other
Borrowers with respect to the payment and performance of all of the Obligations,
it being the intention of the parties hereto that all the Obligations shall be
the joint and several obligations of the Borrowers without preferences or
distinction among them.

     If and to the extent that any Borrower shall fail to make any payment with
respect to any of the Obligations as and when due or to perform any of the
Obligations in accordance with the terms thereof, then in each such event, the
other Borrowers will make such payment with respect to, or perform, such
Obligations.

     The obligations of each Borrower under the provisions of this Section 11.26
constitute full recourse obligations of such Borrower, enforceable against it to
the full extent of its properties and assets, irrespective of the validity,
regularity or enforceability of this Agreement or any other Transaction Document
against another Borrower or any other circumstances whatsoever that under
applicable law might constitute a defense to the joint and several Obligations
of such other Borrowers.

     Except as otherwise expressly provided herein, each Borrower hereby waives
notice of acceptance of its joint and several liability, notice of any and all
Obligations incurred hereunder or under any other Transaction Document, notice
of the occurrence of any Default or Event of Default, or of any demand for any
payment hereunder or any other Transaction Document, notice of any action at any
time taken or omitted by the Agent or any Lender under or in respect of any of
the Obligations, any requirement of diligence and, generally, all demands,
notices and other formalities of every kind in connection with the Obligations,
this Agreement or any other Transaction Document. Each Borrower hereby assents
to, and waives notice of, any extension or postponement of the time for the
payment of any of the Obligations, the acceptance of any partial payment
thereon, any waiver, consent or other action or acquiescence by the Agent or any
Lender at any time or times in respect of any default by any Borrower or the
Guarantor in the performance or satisfaction of any term, covenant, condition or
provision hereunder or under this Agreement or any other Transaction Document,
any and all other indulgences whatsoever by the Agent or any Lender in respect
of any of the Obligations, and the taking, addition, substitution or release, in
whole or in part, at any time or times, of any security for any of the
Obligations or the addition, substitution or release, in whole or in part, of
any Borrower or the Guarantor. Without limiting the generality of the foregoing,
each Borrower assents to any other action or delay in acting or failure to act
on the part of the Agent or any Lender, including, without limitation, any


                                      -67-



failure strictly or diligently to assert any right or to pursue any remedy or to
comply fully with applicable laws or regulations thereunder which might, but for
the provisions of this Section 11.26, afford grounds for terminating,
discharging or relieving such Borrower, in whole or in part, from any of its
obligations under this Section 11.26, it being the intention of each Borrower
that, so long as any of the Obligations remain unsatisfied, the obligations of
such Borrower shall not be discharged. The Obligations of each Borrower shall
not be diminished or rendered unenforceable by any winding up, reorganization,
arrangement, liquidation, reconstruction or similar proceeding with respect to
the Guarantor or any other Borrower or any Lender. The joint and several
liability of the Borrowers hereunder shall continue in full force and effect
notwithstanding any absorption, merger, amalgamation or any other change
whatsoever in the name, membership, constitution or place of formation of any
Borrower, the Guarantor or any Lender.

     The provisions of this Section 11.26 are made for the benefit of the Agent
and each Lender and their successors and assigns, and may be enforced by such
party from time to time against any of the Borrowers or the Guarantor as often
as occasion therefor may arise and without requirement on the part of the Agent
or any Lender first to marshal any of its claims or to exercise any of its
rights against one or more Borrowers or the Guarantor or to exhaust any remedies
available to it against one or more Borrowers or the Guarantor or to resort to
any other source or means of obtaining payment of any of the Obligations or to
elect any other remedy. The provisions of this Section 11.26 shall remain in
effect until all the Obligations shall have been paid in full and otherwise
fully satisfied. If at any time, any payment, or any part thereof, made in
respect of any of the Obligations, is rescinded or must otherwise be restored or
returned by the Agent or any Lender upon the insolvency, bankruptcy or
reorganization of any of the Borrowers or the Guarantor, or otherwise, the
provisions of this Section 11.26 will forthwith be reinstated in effect, as
though such payment had not been made.

     Section 11.27 Amendment and Restatement. This Agreement is an amendment and
restatement of the Credit Agreement dated as of June 1, 2004 (the "Old Credit
Agreement") On and after the effective date of this Agreement, each reference
herein and in each other Transaction Document to the "Credit Agreement,"
"thereunder," "thereof," "therein" or any other expression of like import
referring to the Old Credit Agreement shall mean and be a reference to this
Agreement. The execution, delivery and effectiveness of this Agreement shall not
operate as a waiver of any right, power or remedy hereunder or constitute a
waiver of any provision hereof. This amended and restated Agreement does not
constitute a novation or termination of the "Credit Agreement" or any other
Transaction Document and all obligations under the Old Credit Agreement are in
all respects continuing as hereby amended.

                            [signature page follows]


                                      -68-



     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first written above.

                                        GMAC COMMERCIAL FINANCE LLC, as
                                        Agent and Lender


                                        By: /s/ Amina Kirtman
                                            ------------------------------------
                                            Name: AMINA KIRTMAN
                                            Title: VICE PRESIDENT

                                           AMENDED AND RESTATED CREDIT AGREEMENT



                                        TBS INTERNATIONAL LIMITED,
                                        the Guarantor


                                        By: /s/ Tara DeMakes
                                            ------------------------------------
                                            Name: Tara DeMakes
                                            Title: Attorney in fact


                                        HENLEY MARITIME CORP.,
                                        as a Borrower


                                        By: /s/ Tara DeMakes
                                            ------------------------------------
                                            Name:  Tara DeMakes
                                            Title: Attorney in fact


                                        VERNON MARITIME CORP.,
                                        as a Borrower


                                        By: /s/ Tara DeMakes
                                            ------------------------------------
                                            Name:  Tara DeMakes
                                            Title: Attorney in fact


                                        ARDEN MARITIME CORP.,
                                        as a Borrower


                                        By: /s/ Tara DeMakes
                                            ------------------------------------
                                            Name:  Tara DeMakes
                                            Title: Attorney in fact

                                           AMENDED AND RESTATED CREDIT AGREEMENT



                                        OLDCASTLE SHIPPING CORP.,
                                        as a Borrower


                                        By: /s/ Tara DeMakes
                                            ------------------------------------
                                            Name:  Tara DeMakes
                                            Title: Attorney in fact

                                           AMENDED AND RESTATED CREDIT AGREEMENT



                                    EXHIBIT A

                 FORM OF AMENDED AND RESTATED INITIAL LOAN NOTE



                                    EXHIBIT B

                          FORM OF ADDITIONAL LOAN NOTE



                                    EXHIBIT C

                            FORM OF DRAWDOWN REQUEST



                                    EXHIBIT D

                                 MONTHLY REPORT



                                   EXHIBIT E

                                FORM OF MORTGAGE



                                    EXHIBIT F

                 FORM OF AMENDED AND RESTATED PLEDGE AGREEMENT



                                    EXHIBIT G

                                   [Reserved]



                                    EXHIBIT H

                        FORM OF ASSIGNMENT AND ACCEPTANCE



                                   SCHEDULE I

                                   COMMITMENTS



SCHEDULE 4.06

                                   LITIGATION




SCHEDULE 4.10

                                      ERISA




SCHEDULE 4.11

                           OWNERSHIP/EQUITY INTERESTS



SCHEDULE 4.14

                              ENVIRONMENTAL MATTERS




SCHEDULE 4.18

                                  INDEBTEDNESS




SCHEDULE 4.20


      VESSEL INFORMATION/NONCOMPLIANCE WITH MARITIME RULES AND REGULATIONS



SCHEDULE 4.22

               VESSEL CLASSIFICATION-RECOMMENDATIONS OR CONDITIONS
                                 AFFECTING CLASS




SCHEDULE 4.25

             PRINCIPAL PLACE OF BUSINESS AND CHIEF EXECUTIVE OFFICE



                                                               EXECUTION VERSION

                                   APPENDIX A
                                 (DEFINITIONS)

     "Additional Loan" means the provision of capital made by a Lender pursuant
to Section 2.02 of the Agreement.

     "Additional Loan Commitment" means, for each Lender, the amount set for the
opposite such lender's name in Schedule I to the Credit Agreement directly below
the column entitled "Additional Loan Commitment", as same may be increased from
time to time pursuant to Section 2.02 of the Agreement and reduced from time to
time pursuant to Sections 2.06 and/or 2.07 of the Agreement or adjusted from
time to time as a result of assignments to or from such Lender pursuant to
Section 10.11(a) of the Agreement.

     "Additional Loan Note" shall have the meaning provided in Section 2.02(d)
of the Agreement.

     "Additional Loan Reduction Date" means each of the dates determined
pursuant to Section 2.06(b) of the Agreement.

     "Additional Unfunded Amount" has the meaning set forth in Section 2.02(e)
of the Agreement.

     "Adjusted LIBOR" means, for each Interest Period in respect of a LIBOR
Loan, an interest rate per annum (rounded upward to the nearest 1/16th of one
percent (0.0625%)) determined pursuant to the following formula:

                   Adjusted LIBOR =           LIBOR
                                    -------------------------
                                    1.00 - Reserve Percentage

The Adjusted LIBOR shall be adjusted automatically as of the effective date of
any change in the Reserve Percentage.

     "Affiliate" means, with respect to any Person, any other Person (i)
directly or indirectly controlling (including, but not limited to, all directors
and officers of such Person), controlled by, or under direct or indirect common
control with, such Person, or (ii) that directly or indirectly owns more than
five percent (5%) of the voting securities of such Person. A Person shall be
deemed to "control" another Person if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such other Person, whether through the ownership of voting
securities, by contract or otherwise. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" have correlative
meanings.

     "Agent" has the meaning set forth in the initial paragraph of the
Agreement.

     "Agent-Related Persons" means the Agent and any successor Agent appointed
pursuant to Section 10.09 of the Agreement, together with its Affiliates and the
officers, directors, employees, agents and attorneys-in-fact of such Person and
their respective Affiliates.



     "Aggregate Loan Commitment" means the aggregate of the Initial Loan
Commitments and the Additional Loan Commitments for the Lenders, which on the
Closing Date equaled Fifteen Million Dollars ($15,000,000.00) and equals
Twenty-Two Million Five Hundred Thousand Dollars ($22,500,000.00) as of the
Drawdown Date of the first Additional Loan, subject to adjustment as set forth
in Sections 2.02, 2.06 and 2.07 of the Agreement.

     "Agreement" or "Credit Agreement" means the Amended and Restated Credit
Agreement, dated as of June 1, 2004 and amended and restated as of February 1,
2005, among the Borrowers, the Guarantor, the Lenders and the Agent, as amended,
supplemented (including without limitation by the First Supplement or any
subsequent supplement to the Credit Agreement) or otherwise modified from time
to time.

     "Applicable Margin" means, with respect to each Loan, the margin set forth
below:

-------------------------------------------
    LIBOR MARGIN         BASE RATE MARGIN
-------------------------------------------
INITIAL   ADDITIONAL   INITIAL   ADDITIONAL
 LOANS       LOANS      LOANS       LOANS
-------------------------------------------
 3.70%       TBD*       3.80%       TBD*
-------------------------------------------

*The Applicable Margin for any Additional Loans shall be determined in
accordance with Section 2.02 of the Agreement.

     "Applicable U.S. Laws" has the meaning set forth in Section 4.12(b) of the
Agreement.

     "Appraiser" means any of Fearnleys A.S., R.S. Platou Shipbrokers A.S.,
Bassoe Offshore A.S., H. Clarkson Ltd., Simpson Spence Young Ltd., Mallory Jones
Lynch & Flynn, Inc., Compass Maritime Services LLC, Lorentzen Stemoco
Shipbrokers A.S., Braemar Shipbrokers Ltd., Barry Rogliano Salles, Poten &
Partners, Inc., Jaques Pierot & Sons, DuFour Laskay & Strouse, Inc. and Nobel
Denton Marine, together with any other Person not affiliated with the Borrower
and acceptable to the Agent engaged in the business of appraising vessels.

     "Approved Jurisdiction" means the Republic of Panama and The Philippines,
or such other jurisdiction as may be acceptable to the Requisite Lenders.

     "Asset Coverage Ratio" means, at any time, the ratio of (x) the aggregate
outstanding principal amount of the Loans to (y) the aggregate Fair Market Value
of the Vessels at such time.

     "Assignee" shall have the meaning provided in Section 10.11(a) of the
Agreement.

     "Assignment and Acceptance" shall have the meaning provided in Section
10.11(a) of the Agreement.

     "Assignment of Charter" means, with respect to a Vessel, the assignment
between a Borrower and the Agent (on behalf of the Lenders), as amended,
supplemented, restated, renewed and otherwise modified from time to time,
together with any documents contemplated


                                        2



thereby or executed pursuant thereto, whereby such Borrower assigns to the Agent
(on behalf of the Lenders) all of its right, title and interest in, to and under
each Charter to such Vessel.

     "Assignment of Earnings and Insurances" means, with respect to a Vessel,
one or more assignments between a Liner, manager, bareboat charterer, Borrower,
Guarantor or any other Person that has a leasehold interest or ownership
interest in a Vessel or control over the Earnings or Insurances with respect to
such Vessel and the Agent, on behalf of the Lenders, as the same from time to
time may be amended, restated, supplemented, renewed or otherwise modified, in
each case in accordance with the terms thereof, pursuant to which such Person
assigns to the Agent, on behalf of the Lenders, all of its right, title and
interest in, to and under the Earnings and Insurances with respect to such
Vessel.

     "Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value of the obligation of the lessee
for net rental payments during the remaining term of the lease included in such
sale and leaseback transaction including any period for which such lease has
been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.

     "Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as amended and in effect from time to time.

     "Base Rate" means as of the second Business Day immediately preceding a
Drawdown Date for a Base Rate Loan, a rate per annum equal to the Five-Year US
Treasury Note Yield in effect on such day.

     "Base Rate Loan" means any Loan designated as such by a Borrower in the
related Drawdown Request at the time of the incurrence thereof, conversion or
continuation thereto, which Loan shall bear interest based on the Base Rate.

     "Borrower" means any of, and "Borrowers" means all of, Henley Maritime
Corp., Vernon Maritime Corp., Arden Maritime Corp., and Oldcastle Shipping
Corp., and each other Person that may become a "Borrower" under the Agreement
pursuant to a supplement thereto (in form and substance satisfactory to the
Agent and the Lenders).

     "Business Day" means any day which is not a Saturday, Sunday or legal
holiday or any other day on which the New York Stock Exchange, the Federal
Reserve Bank of New York or banking institutions in New York, New York USA or
Atlanta, Georgia USA are authorized or required by law, regulation or executive
order to close.

     "Capital Lease Obligation" means, at the time any determination is to be
made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP.

     "CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as same may be amended from time to time.


                                        3



     "Change in Law" means (a) the adoption of any law, rule or regulation after
the Closing Date or a Drawdown Date, (b) any change in law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the Closing Date or a Drawdown Date or (c) compliance by any Lender with
any request, guideline or directive (whether or not having the force of law) of
any Governmental Authority made or issued after the Closing Date or a Drawdown
Date.

     "Charter" means each leasing or hiring of a Vessel, including, without
limitation, each bareboat charter and time charter.

     "Closing Date" means June 30, 2004.

     "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated and rulings issued thereunder. Section
references to the Code are to the Code, as in effect at the date of the
Agreement and any subsequent provisions of the Code amendatory thereof,
supplemental thereto or substituted therefor.

     "Collateral" means the Vessels, the Earnings on the Vessels, the Charters,
the Guarantees, the Insurances on the Vessels, the Mortgages, any Hedging
Agreements, the Pledged Collateral from time to time subject to the Pledge
Agreement and any other property in which a security interest is created in
favor of the Agent for the benefit of the Lenders to secure the payment and
performance of the Obligations of the Borrowers and the Guarantor under the
Credit Agreement or the other Transaction Documents, including, without
limitation, all rights, powers, and options (but none of the obligations) of the
Borrowers with respect thereto (including, without limitation, the immediate
and continuing right to claim for, collect, receive, and give receipts for any
income and proceeds in respect of any of the related Collateral and all other
moneys payable in respect thereof), to give and receive notices and other
communications, to make waivers, amendments or other agreements, to exercise all
rights and options, to bring judicial proceedings in the name of a Borrower or
otherwise and generally to do and receive anything that a Borrower is or may be
entitled to do or receive), all books and records pertaining to any or all of
the foregoing and all income, payments and proceeds of the foregoing and
products of any and all of the foregoing.

     "Commitment" means either of and "Commitments" means the Initial Loan
Commitment and the Additional Loan Commitment.

     "Compulsory Acquisition" means, with respect to a Vessel, the requisition
for title or other compulsory acquisition of such Vessel (including, without
limitation, title to or use of such Vessel, but not including requisition for
hire), condemnation, capture, seizure, detention or confiscation of such Vessel
by any Governmental Authority or by Persons acting or purporting to act on
behalf of any Governmental Authority.

     "Consolidated Funded Debt" means, with respect to any Person as of any date
of determination, the sum, without duplication, of (i) the total amount of
Indebtedness of such Person and its Subsidiaries, plus (ii) the total amount of
Indebtedness of any other Person, to the extent that such Indebtedness has been
Guaranteed by such Person or one or more of its


                                        4



Subsidiaries, plus (iii) the aggregate value of all Disqualified Shares of such
Person, in each case, determined on a consolidated basis in accordance with
GAAP.

     "Consolidated Interest Expense" means, for any period, the sum of:

          (A)  the total interest expense of the Borrowers and the Guarantor
               plus, to the extent not otherwise included in such interest
               expense (without duplication), and to the extent incurred by the
               Borrowers or the Guarantor:

               (1)  interest expense attributable to Capital Lease Obligations,
                    the interest expense attributable to leases constituting
                    part of a sale and leaseback transaction and the interest
                    portion of rent expense associated with Attributable Debt in
                    respect of the relevant lease giving rise thereto,
                    determined as if such lease were a capitalized lease in
                    accordance with GAAP and the interest component of any
                    deferred payment obligations;

               (2)  amortization of debt discount but not debt issuance costs;

               (3)  non-cash interest expense;

               (4)  amortization of commissions, discounts and other fees and
                    charges owed with respect to letters of credit and bankers'
                    acceptance financing;

               (5)  interest accruing on any Indebtedness of any other Person to
                    the extent such Indebtedness is Guaranteed by (or secured by
                    the assets of) a Borrower or the Guarantor;

               (6)  net costs associated with Hedging Obligations (excluding
                    amortization of fees paid at the time of entering into such
                    Hedging Obligations); plus

          (B)  all dividends, whether paid or accrued and whether or not in
               cash, on any series of Preferred Shares of a Person or any of its
               Subsidiaries payable to a Person other than a Borrower or the
               Guarantor; plus

          (C)  cash contributions to any employee stock ownership plan or other
               trust for the benefit of employees to the extent such
               contributions are used by such plan or trust to pay interest or
               fees to any Person (other than a Borrower and/or the Guarantor)
               in connection with Indebtedness incurred by such plan or trust to
               purchase share capital of a Borrower or the Guarantor.

     "Consolidated Net Income" means, for any period for any Person, the net
income (loss) of such Person and its consolidated Subsidiaries determined in
accordance with GAAP; provided, however, that there shall not be included in
determining such Consolidated Net Income:


                                        5



          (A)  any net income (or loss) of any Subsidiary if at the date of
               determination the making of distributions or the payment of
               dividends by such Subsidiary are not permitted without any prior
               governmental approval (that has not been obtained) or, directly
               or indirectly, by operation of the terms of its charter or other
               organizational document or any agreement, instrument, judgment,
               decree, order, statute, rule or governmental regulation
               applicable to that Subsidiary or its stockholders except:

               (i)  the Guarantor's equity in the net income of any such
                    Subsidiary for such period shall be included in such
                    Consolidated Net Income up to the aggregate amount of cash
                    distributed by such Subsidiary during such period to the
                    Guarantor or a Subsidiary thereof as a dividend or other
                    distribution (subject, in the case of a dividend to a
                    Subsidiary, to the limitation contained in this clause); and

               (ii) the Guarantor's equity in a net loss of any such Subsidiary
                    for such period shall be included in determining such
                    Consolidated Net Income;

          (B)  any gain or loss, together with any related provision for taxes
               on such gain or loss, realized upon (i) a sale or other
               disposition of any assets of the Guarantor, its consolidated
               Subsidiaries or any other Person (including pursuant to any sale
               and leaseback transaction) which is not sold or otherwise
               disposed of in the ordinary course of business, (ii) the sale or
               other disposition of any securities of any Person not sold or
               otherwise disposed of in the ordinary course of business or (iii)
               the extinguishment of any Indebtedness of any Person;

          (C)  any extraordinary gain or loss, together with any related
               provision for taxes on such extraordinary gain or loss.

     "Counterparty" means any Lender or any Affiliate of a Lender who enters
into a Hedging Agreement with a Borrower.

     "Credit Party" means either of and "Credit Parties" means each Borrower,
Westbrook and the Guarantor.

     "Default" shall mean an Event of Default or any condition or event which,
with notice or lapse of time or both, would constitute an Event of Default.

     "Defaulting Lender" means any Lender that shall have failed to honor its
Commitment as described in Section 2.01 or Section 2.02 of the Agreement.

     "Disqualified Shares" means any Share Capital that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Share Capital), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of


                                        6



the holder of the Share Capital, in whole or in part, on or prior to the date
that is 91 days after the Maturity Date.

     "Dollars" and the sign "$" shall each mean freely transferable lawful money
of the United States (expressed in dollars).

     "Drawdown Date" means each Business Day designated by a Borrower in a
Drawdown Request, as the day on which a Loan, subject to the terms and
conditions of the Agreement, is requested to be made by the Lenders to such
Borrower.

     "Drawdown Request" means, with respect to any borrowing, conversion or
continuation of a Loan, a written request, substantially in the form of Exhibit
C to the Credit Agreement executed by an Executive Officer of a Borrower wherein
such Borrower indicates, among other things, (a) whether the Loan is an Initial
Loan or an Additional Loan, (b) the proposed Drawdown Date, (c) the amount of
such Loan, (d) the initial Interest Period for such Loan, (e) whether such Loan
is a Base Rate Loan or a LIBOR Loan, and (f) the disbursement instructions
therefor.

     "Earnings" means and includes all present and future moneys and claims
which are earned by or become payable to or for the account of a Borrower or the
Guarantor in connection with the operation or ownership of a Vessel, including,
but not limited to, freights, passage and hire moneys, remuneration for salvage
and towage services, demurrage and detention moneys, all present and future
moneys and claims payable to a Borrower or the Guarantor in respect of any
breach or variation of any charterparty or contract of affreightment in respect
of a Vessel, and all moneys and claims payable to a Borrower or the Guarantor in
respect of the requisition for hire of a Vessel.

     "EBITDA" means, with respect to one or more Borrowers and/or the Guarantor
for any period, as reported in the financial statements most recently delivered
to the Agent, the Consolidated Net Income of such Person for such period plus
the following to the extent deducted in calculating such Consolidated Net
Income:

          (A)  all Federal, state and local and all foreign income tax expense;

          (B)  Consolidated Interest Expense;

          (C)  depreciation expense and amortization expense; and

          (D)  the sum of any non-cash costs, charges or expenses attributable
               to the accrual of or reserve for cash charges in any future
               period for pension liabilities of a Borrower and/or the
               Guarantor.

Notwithstanding the foregoing, amounts relating to a Borrower shall be added to
Consolidated Net Income to compute EBITDA only to the extent (and in the same
proportion) that the net income (or loss) of such Borrower was included in
calculating Consolidated Net Income.

     "Eligible Lender" means and includes a commercial bank, financial
institution or other institutional "accredited investor" (as defined in
Regulation D of the Securities Act).


                                        7



     "Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, directives, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any Environmental Law or any permit issued, or any approval given,
under any such Environmental Law (hereafter, "Claims"), including, without
limitation, (a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (b) any and all Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief in connection with alleged injury or threat of
injury to health, safety or the environment due to the presence of Hazardous
Materials.

     "Environmental Law" means any applicable federal, state, provincial,
foreign or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy or rule of common
law now or hereafter in effect and in each case as amended, or any binding
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, to the extent binding on the
Guarantor or any of its Subsidiaries, relating to the environment, employee
health and safety or Hazardous Materials, including, without limitation, CERCLA;
RCRA; the Federal Water Pollution Control Act, 33 USC. Section 1251 et seq.; the
Toxic Substances Control Act, 15 USC. Section 2601 et seq.; the Clean Air Act,
42 USC. Section 7401 et seq.; the Safe Drinking Water Act, 42 USC. Section 3803
et seq.; the Oil Pollution Act of 1990, 33 USC. Section 2701 et seq.; the
Emergency Planning and the Community Right-to-Know Act of 1986, 42 USC. Section
11001 et seq.; the Hazardous Material Transportation Act, 49 USC. Section 1801
et seq.; and the Occupational Safety and Health Act, 29 USC. Section 651 et seq.
(to the extent it regulates occupational exposure to Hazardous Materials); any
state and local or foreign counterparts or equivalents, in each case as amended
from time to time.

     "Equity Interests" means Share Capital and all warrants, options or other
rights to acquire Share Capital.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of the Agreement, and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.

     "ERISA Affiliate" means each person (as defined in Section 3(9) of ERISA)
which together with the Guarantor or a Subsidiary of the Guarantor would be
deemed to be a "single employer" (i) within the meaning of Section 414(b), (c),
(m) or (o) of the Code or (ii) as a result of the Guarantor or a Subsidiary of
the Guarantor being or having been a general partner of such person.

     "Event of Default" means any of the events described in Article IX of the
Agreement or in a Note.

     "Excluded Taxes" any tax imposed on or measured by the net income or
profits of a Lender, or any franchise tax based on the net income or net profits
of a Lender, in either case pursuant to the laws of (a) the United States, (b)
any jurisdiction (or political subdivision thereof) of which the Agent or any
other Lender, as the case may be, is a citizen or is resident or in which


                                        8



such Lender has a permanent establishment (or is otherwise engaged in the active
conduct of its banking business through an office or a branch) which is such
Lender's applicable Lending Office, (c) the jurisdiction (or any political
subdivision thereof) in which the Agent or any other Lender is organized, and
(d) any jurisdiction (or political subdivision thereof) in which the Agent or
any other Lender is presently doing business which taxes are imposed solely as a
result of doing business in such jurisdiction.

     "Executive Officer" means, with respect to a Person, any officer having the
authority to bind such Person pursuant to the terms of the constitutive
documents of such Person.

     "Existing Charter" means, (A) with respect to the Tayrona Princess, the
charter, dated March 15, 2002, between Arden Maritime Corp., as charterer, and
Grincor Shipping Services (Pty) Ltd. ("Grincor"), as owner, and, (B) with
respect to the Mohegan Princess, the charter, dated March 15, 2002, between
Vernon Maritime Corp., as charterer, and Grincor, as owner, each as amended by
Addendum No. 1 and Addendum No. 2, each dated July 12, 2002, among Grincor, as
previous owner, Arden and Vernon, as charterers, and Cape Shipping Limited, as
new owners.

     "Facility" means the Twenty-Two Million Five Hundred Thousand Dollar
($22,500,000) (or such other amount as may be determined pursuant to the
Agreement) secured credit facility created pursuant to the Agreement consisting
of the Initial Loans and together with the maximum principal amount that may be
advanced as Additional Loans.

     "Fair Market Value" means, with respect to a Vessel, the fair market sale
value (with no value given to pooling arrangements) as of a specified date of
such Vessel, determined on a standalone basis free and clear of any Liens, that
would be obtained in an arm's-length transaction between an informed and willing
seller under no compulsion to sell and an informed and willing buyer under no
compulsion to buy, as determined by an Appraiser selected by the Agent at the
expense of the Guarantor; provided, however, that the Guarantor shall have the
option to select an additional Appraiser to make such determination and, in such
case, the "Fair Market Value" shall be the average of the fair market sale value
determined by the Agent's Appraiser and the fair market sale value determined by
the Guarantor's Appraiser.

     "Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day of such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by it.

     "Federal Reserve Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.

     "Filipino Bareboat Charter" means any one or more of or all of (as the
context may require) of (w) the Standard Bareboat Charter, dated September 28,
2004, between Oldcastle and Viking, (x) the Standard Bareboat Charter, dated
April 12, 2004, between Henley and Viking, (y)


                                        9



the Standard Bareboat Charter, dated June 2, 2004, between Vernon and Overseas
Bulk and/or (z) the Standard Bareboat Charter, dated June 2, 2004, between Arden
and Overseas Bulk, in each case as amended, supplemented, restated, renewed and
otherwise modified from time to time.

     "First Supplement" means the First Supplement to the Credit Agreement,
dated as of February 1, 2005, by and among the Borrowers, the Guarantor, the
Lenders and the Agent, as amended, supplemented or otherwise modified from time
to time.

     "Five-Year US Treasury Note Yield" means the "5-Year US Treasury Note"
yield quoted by the Wall Street Journal at the opening of business in Atlanta,
Georgia USA as of the relevant date of determination.

     "Fixed Charge Coverage Ratio" means as of any date of determination the
ratio of (x) EBITDA to (y) Interest Expense plus Current Portion of Long-Term
Debt (including, without limitation, any Capital Lease Obligations) appearing on
the consolidated financial statements of the Guarantor prepared in accordance
with GAAP.

     "Fixed Interest Rate" means a rate per annum equal to the Base Rate for the
relevant Interest Period plus the Applicable Margin (computed on the basis of a
year of 365 days for the actual number of days--including the first day but
excluding the last day--occurring in the period for which such interest is
payable).

     "Floating Interest Rate" means a rate per annum equal to the Adjusted LIBOR
for the relevant Interest Period plus the Applicable Margin (computed on the
basis of a year of 360 days for the actual number of days--including the first
day but excluding the last day--occurring in the period for which such interest
is payable).

     "Foreign Pension Plan" means any plan, fund (including, without limitation,
any superannuation fund) or other similar program established or maintained
outside the United States by the Guarantor or any one or more of its
Subsidiaries primarily for the benefit of employees of the Guarantor or such
Subsidiaries residing outside the United States, which plan, fund or other
similar program provides, or results in, retirement income, a deferral of income
in contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.

     "GAAP" means generally accepted accounting principles as in effect from
time to time in the United States consistently applied, except as disclosed in
the financial statements of the Guarantor.

     "GMAC CF" has the meaning set forth in the initial paragraph of the
Agreement.

     "Governmental Authority" means any public body, government, parliament,
legislature, regulatory authority, agency, commission, tribunal, department,
commission, board, instrumentality, court, arbitration board or arbitrator or
other law, regulation or rule making entity (including a Minister of the Crown)
having or purporting to have jurisdiction over, including, without limitation,
any country in which any Credit Party is organized, continued, amalgamated,
merged or otherwise created or established or in which any Credit Party carries
on


                                       10



business or holds property, or any province, territory, state, municipality,
district or political subdivision of any such country or of any such state,
province or territory of such country.

     "Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.

     "Guarantee Obligation" shall have the meaning provided in Section 8.01(a)
of the Agreement.

     "Guarantor" means TBS International Limited, together with its successors
and assigns.

     "Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of poly-chlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous materials,"
"extremely hazardous substances," "restricted hazardous waste," "toxic
substances," "toxic pollutants," "contaminants," "dangerous goods," or
"pollutants," or words of similar import, under any applicable Environmental
Law; and (c) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority under
Environmental Laws.

     "Hedging Agreement" means any agreement entered into by and between one or
more Borrowers and the Agent or any Lender or any Affiliate of the Agent or the
Lender pursuant to which such Borrower(s) have the ability to reduce exposure to
currency or interest rate risks, as any such Hedging Agreement from time to time
may be amended, restated, supplemented, renewed or otherwise modified.

     "Hedging Obligations" means, with respect to any specified Person, the net
amount of the obligations of such Person under interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements, foreign currency
exchange agreements, commodity price protection agreements and other agreements
or arrangements designed to protect such Person against fluctuations in interest
rates, foreign currency exchange rates and commodity prices.

     "Indebtedness" means, with respect to a Person, any obligation of such
Person, whether or not contingent:

          (A)  in respect of borrowed money;

          (B)  evidenced by bonds, notes, debentures, promissory notes, loan
               agreements or similar instruments, letters of credit or
               reimbursement agreements in respect of letters of credit (other
               than obligations with respect to letters of credit securing
               obligations entered into in the ordinary course of business of
               such Person to the extent such letters of credit are not drawn
               upon or, if and to the extent drawn upon, such drawing is
               reimbursed no later than the tenth Business Day following payment
               on the letter of credit);


                                       11



          (C)  in respect of bankers' acceptances;

          (D)  representing Capital Lease Obligations;

          (E)  representing the balance deferred and unpaid of the purchase
               price of any property, except any such balance that constitutes
               an accrued expense or trade payable;

          (F)  representing any Hedging Obligations; or

          (G)  representing the maximum fixed repurchase price of Disqualified
               Shares;

if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any indebtedness of any other Person.

The amount of any Indebtedness outstanding as of any date shall be:

          (A)  in the case of any Indebtedness issued with original issue
               discount, the accreted value of the Indebtedness; and

          (B)  in the case of any other Indebtedness, the principal amount of
               the Indebtedness, together with any interest on the Indebtedness
               that is more than 30 days past due.

     "Indemnified Liabilities" shall have the meaning provided in Section 3.06
of the Agreement.

     "Indemnified Party" means each of and "Indemnified Parties" means
collectively the Agent and each Lender and each of their respective Affiliates,
directors, officers, employees and agents and any Person who controls any of
them within the meaning of the federal, state and foreign securities laws.

     "Indemnified Taxes" means any Taxes (including, without limitation, income
taxes withheld at source) other than Excluded Taxes.

     "Initial Loan Commitment" means, for each Lender, the amount set for the
opposite such Lender's name in Schedule I to the Credit Agreement directly below
the column entitled "Initial Loan Commitment", as same may be reduced from time
to time pursuant to Sections 2.06 and/or 2.07 of the Agreement or adjusted from
time to time as a result of assignments to or from such Lender pursuant to
Section 10.11(a) of the Agreement.

     "Initial Loan Note" shall have the meaning provided in Section 2.01(e) of
the Agreement.


                                       12



     "Initial Loan Reduction Date" means each of the dates determined pursuant
to the table set forth in Section 2.06(a) of the Agreement.

     "Initial Loans" means the provision of capital made by a Lender pursuant to
Section 2.01 of the Agreement.

     "Initial Unfunded Amount" shall have the meaning set forth in Section 2.01
(f) of the Agreement.

     "Insurances" includes all policies and contracts of insurance whatsoever
(which expression includes all entries of a Vessel in a protection and indemnity
or war risks association) which are from time to time taken out or entered into
by or on behalf of the Credit Parties in respect of a Vessel and their Earnings
or otherwise in connection with a Vessel.

     "Insured Value" means, with respect to a Vessel, the greater of (x) the
full commercial value of such Vessel and (y) 110% of the Fair Market Value of
such Vessel, in each case, as measured at the time of each renewal, or such
greater sums as such Shipowner may desire and are enforceable.

     "Interest Expense" means, with respect to the Guarantor for any period, the
Consolidated Interest Expense for each of the Guarantor's most recently ended
four fiscal quarters, as reported in the financial statements most recently
delivered to the Agent.

     "Interest Period" means, with respect to any Loan, each calendar month,
commencing on the Drawdown Date, with respect to the first Interest Period for
such Loan, and ending on the last day of the calendar month in which such Loan
was made, and with respect to all other Interest Periods, each subsequent
calendar month.

     "Interest Rate" means either or both (as the context may require) a
Floating Interest Rate and/or a Fixed Interest Rate.

     "Investment" means any direct or indirect advance, loan or other extension
of credit (including by way of guarantee or similar arrangement) or capital
contribution to (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others), or any
purchase or acquisition of capital stock (or other equity interest),
Indebtedness or other similar instruments.

     "ISM Code" shall have the meaning provided in Section 6.20(b) of the
Agreement.

     "Lender" and "Lenders" have the meanings set forth in the initial paragraph
of the Agreement.

     "Lending Office" means, with respect to any Lender, the office or offices
of the Lender specified opposite its name on the applicable signature page to
the Loan Agreement, or such other office or offices of the Lender as it may from
time to time notify the Guarantor and the Agent.


                                       13



     "LIBOR" means, with respect to an Interest Period and any Loan to be made,
continued as or converted into a LIBOR Loan, the rate for a period of time
comparable to the numbers of days in such Interest Period which appears on the
Telerate Page 3750 (or such other page as may replace the page on that service
for the purpose of displaying London inter-bank market rates) at or about 11:00
a.m., London time, on the date that is two London Banking Days preceding the
date of calculation. If, at any time of determination, two such offered rates
appear on the Telerate Page 3750, LIBOR will be the arithmetic mean of such
offered rates (rounded to the nearest.0001 percentage point). If, at any time of
determination, the Telerate Page 3750 or any replacement page is not available,
LIBOR will be calculated as the average (rounded upward, if necessary to the
next higher 1/16 of 1%) of the respective rates per annum at which deposits in
United States dollars are offered to each of three reference banks of
internationally recognized standing selected by the Agent in the London
interbank market for Dollar deposits of amounts comparable to the principal
amount of the LIBOR Loan to which such LIBOR rate is to be applicable with
maturities comparable to the Interest Period for which such LIBOR rate will
apply at approximately 11:00 a.m., London time, on the date that is two London
(US$) Banking Days preceding the date of calculation. The determination of LIBOR
by the Agent shall be conclusive in the absence of manifest error.

     "LIBOR Loan" means a Loan that bears interest based on Adjusted LIBOR.

     "Lien" means mean any mortgage, charge (whether fixed or floating), pledge,
hypothecation, assignment, charter, deposit arrangement, encumbrance, lien
(statutory or other), preference, priority or other security agreement of any
kind or nature whatsoever (including, without limitation, any conditional sale
or other title retention agreement, any financing or similar statement or notice
filed under the UCC or any other applicable personal property security
legislation in any jurisdiction or any other similar recording or notice
statute, and any lease having substantially the same effect as any of the
foregoing).

     "Liner" means one or more of the following (as the context may require):
TBS North America Liner, Ltd., TBS Pacific Liner, Ltd., TBS Latin America Liner,
Ltd., TBS Eurolines, Ltd., TBS Middle East Carriers, Ltd. and TBS Ocean
Carriers, Ltd.

     "Loan" means either of, and "Loans" means both of the Initial Loans and the
Additional Loans.

     "London Banking Day" means any day on which dealings in deposits in United
States dollars are carried on in the London interbank market and on which
commercial banks are open for domestic and international business (including
dealings in United States dollar deposits) in London and New York.

     "Make-Whole Amount" means, with respect to the Initial Loans, a prepayment
premium equal to (i) three percent (3.0%) of the principal amount prepaid if
prepaid during the period from the initial Drawdown Date to the first
anniversary of the initial Drawdown Date, (ii) two percent (2.0%) of the
principal amount prepaid if prepaid during the period from the first anniversary
of the initial Drawdown Date to the second anniversary of the initial Drawdown
Date, or (iii) one percent (1.0%) of the principal amount prepaid if prepaid
during the period from the second anniversary of the initial Drawdown Date to
the date that is third anniversary of


                                       14



the initial Drawdown Date; provided that, for the avoidance of doubt, no
optional prepayment premium with respect to the Initial Loans shall be payable
if the principal amount prepaid is prepaid on or after the date that is 36
months after the initial Drawdown Date; provided further that the Borrower, the
Lenders and the Agent shall determine the amount of any prepayment premium
payable by the Borrower in connection with any Additional Loans.

     "Margin Stock" shall have the meaning provided in Regulation U of the Board
of Governors of the Federal Reserve System.

     "Material Adverse Change" means any circumstance or event or any set of
circumstances or events which (a) has or could reasonably be expected to have
any material adverse effect whatsoever upon the validity or enforceability of
any Transaction Document, (b) is or could reasonably be expected to be material
and adverse to the condition (financial or otherwise) or business operations of
any Borrower, Westbrook or the Guarantor, individually or taken together as a
whole, (c) materially impairs or could reasonably be expected to materially
impair the ability of any Borrower, Westbrook or the Guarantor to perform their
respective obligations under the Transaction Documents, or (d) materially
impairs or could reasonably be expected to materially impair the ability of the
Agent to enforce any of the Transaction Documents or any Lender to enforce its
Note.

     "Maturity Date" means, with respect to the Initial Loans, the fifth (5th)
anniversary of the Closing Date or if such date is not a Business Day, the
Business Day immediately preceding such date and, with respect to any Additional
Loans, the date specified in the schedule delivered pursuant to Section 2.02(a)
of the Agreement.

     "Memorandum of Three Party Agreement" means any one or more of or all of
(as the context may require) of (w) the Memorandum of Three Party Agreement,
dated September 28, 2004, among PacRim, Oldcastle and Viking, (x) the
Memorandum of Three Party Agreement, dated April 12, 2004, among PacRim, Henley
and Viking, (y) the Memorandum of Three Party Agreement, dated June 2, 2004,
among PacRim, Vernon and Overseas Bulk and/or (z) the Memorandum of Three Party
Agreement, dated June 2, 2004, among PacRim, Arden and Overseas Bulk, in each
case as amended, supplemented, restated, renewed and otherwise modified from
time to time.

     "Minimum Borrowing Amount" means, for Loans, $1,000,000 and integral
multiples of $100,000 thereafter.

     "Mohegan" or "Mohegan Princess" means the Vessel described on Schedule I to
the First Priority Naval Fleet Mortgage, made on the 29th day of June 2004 and
dated the 30th day of June 2004, granted by Arden, Henley and Vernon in favor of
the Agent.

     "Mortgage" means, with respect to a Vessel, the first priority naval
registered ship mortgage on such Vessel substantially in the form of Exhibit E
to the Agreement, granted by the related Borrower(s) to the Agent, on behalf of
the Lenders, as such Mortgage from time to time may be amended, restated,
supplemented, renewed or otherwise modified in accordance with the terms of such
Mortgage.


                                       15



     "Non-Defaulting Lender" means, at any time, each Lender other than any
Defaulting Lender at such time.

     "Note" means either of, and "Notes" means both of, an Initial Loan Note and
an Additional Loan Note, as the same from time to time may be amended, restated,
supplemented, renewed or otherwise modified.

     "Obligations" means any and all of the obligations of each Borrower and/or
the Guarantor, whether due or to become due, matured or unmatured, liquidated or
unliquidated, contingent or non-contingent, and all covenants and duties
regarding such amounts, of any kind or nature, present or future, whether or not
evidenced by any note, agreement or other instrument, in each case arising under
the Agreement or under any Note, Hedging Agreement, under any of the Transaction
Documents or under any currency hedging agreement arranged by a Lender or an
Affiliate of a Lender. This term includes, without limitation, all principal,
interest (including interest that accrues after the commencement by or against
any Borrower and/or the Guarantor of any action under the Bankruptcy Code),
Taxes, Other Taxes, fees (including, without limitation, any and all arrangement
fees, loan fees, agent fees and any and all other fees), expenses, costs or
other sums (including attorney fees and expenses) chargeable to any Borrower
and/or the Guarantor under any of the Transaction Documents.

     "Originating Lender" shall have the meaning provided in Section 10.11(d) of
the Agreement.

     "Other Taxes" means any and all current or future stamp or documentary
taxes or other excise or property taxes, charges or similar levies arising from
any payment made hereunder or under the Notes or from the execution, delivery,
registration, enforcement, of or otherwise with respect to, any Transaction
Document.

     "Overdue Rate" means, with respect to a Note, a rate per annum for each day
from the date of a default in any payment hereunder until such payment shall be
paid in full equal to (a) in the case of any LIBOR Loan, the rate that would be
applicable under the Agreement to such LIBOR Loan plus two percent (2.0%) per
annum, and (b) in the case of any other overdue amount, the rate that would be
applicable under the Agreement to a Base Rate Loan, plus two percent (2.0%) per
annum.

     "Overseas Bulk" means Overseas Bulk Transport, Inc., a company organized
under the laws of the Philippines, together with its successors and assigns.

     "PacRim" means Pacific Rim Shipping Corp., a company organized under the
laws of the Marshall Islands, together with its successors and assigns.

     "Participant" shall have the meaning provided in Section 10.11(d) of the
Agreement.

     "Payment Date" means the last Business Day of each Interest Period.

     "PBGC" means, the Pension Benefit Guaranty Corporation.


                                       16



     "Permitted Encumbrances" means: (a) liens or rights in rem for current
crew's wages, for general average or salvage (including contract salvage) or for
wages of stevedores employed by the charterer, the operator, agent or master of
a Vessel which in each case (i) are unclaimed or (ii) shall not have been due
and payable for ten (10) days after termination of a voyage; (b) liens or rights
in rem for repairs or incident to current operations of a Vessel (other than
those referred to in clause (a) above), but only to the extent in each case that
such liens are based on claims not yet delinquent and do not involve any risk of
a sale, forfeiture, hindrance to operation or loss of such Vessel; (c) liens
covered by valid and collectible policies of insurance held with respect to a
Vessel and meeting the requirements of the related Mortgage; (d) the lien of the
Mortgages and the other Transaction Documents; and (e) any other liens expressly
permitted by any of the Transaction Documents.

     "Permitted Pledge Liens" means:

          (A)  Liens for taxes, assessments or other governmental charges or
               levies not yet due or which are being contested in good faith by
               appropriate action or proceedings and with respect to which
               adequate reserves are being maintained in accordance with GAAP;

          (B)  Liens resulting from operation of law with respect to any
               judgments or orders not constituting a Default or not having a
               Material Adverse Change; and

          (C)  Liens created by the Pledge Agreement and the other Transaction
               Documents.

     "Person" means an individual, a corporation, a partnership, an association,
a trust, a limited liability company or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.

     "Plan" means any pension plan, as defined in Section 3(2) of ERISA, which
is maintained or contributed to by (or to which there is an obligation to
contribute of), the Guarantor or a Subsidiary of the Guarantor or an ERISA
Affiliate, and each such plan for the five year period immediately following the
latest date on which the Guarantor, a Subsidiary of the Guarantor or an ERISA
Affiliate maintained, contributed or had an obligation to contribute to such
plan.

     "Pledge Agreement" means the Amended and Restated Pledge Agreement, dated
as of June 1, 2004 and amended and restated as of February 1, 2005, from
Westbrook to the Agent on behalf of the Lenders, substantially in the form of
Exhibit F to the Agreement, as the same may be amended, restated, supplemented,
renewed or otherwise modified from time to time in accordance with the terms
thereof.

     "Pledged Collateral" has the meaning set forth in the Pledge Agreement.

     "Pledged Interests" means, collectively, (a) the Equity Interests described
in Annexes A of the Pledge Agreement and (b) each Equity Interest pledged
pursuant to Section 1(b) of the Pledge Agreement from time to time.


                                       17



     "Preferred Shares" of any Person means any Equity Interests of such Person
that have any rights which are preferential to the rights of any other Equity
Interests of such Person with respect to dividends or redemptions or upon
liquidation.

     "Prime Rate" means the rate of interest per annum publicly announced from
time to time by JPMorgan Chase Bank as its prime rate in effect at its principal
office in New York, New York; each change in the Prime Rate shall be effective
from and including the date such change is publicly announced as being
effective.

     "Prohibited Jurisdiction" means, any country or jurisdiction, from time to
time, that is the subject of a prohibition order (or any similar order or
directive), sanctions or restrictions promulgated or administered by any
Governmental Authority.

     "Prohibited Person" means, any Person who is the subject of a prohibition
order (or any similar order or directive), sanctions or restrictions promulgated
or administered by any Governmental Authority.

     "Proportionate Share" means (a) with respect to the Initial Loans and a
Lender, a fraction expressed as a percentage, the numerator of which shall be
the amount of such Lender's Initial Loan Commitment and the denominator of which
shall be the Aggregate Initial Loan Commitment and (b) with respect to
Additional Loans and a Lender, a fraction expressed as a percentage, the
numerator of which shall be the amount of such Lender's Aggregate Loan
Commitment and the denominator of which shall be the Aggregate Loan Commitment
or, if the Aggregate Loan Commitment is terminated, a fraction expressed as a
percentage the numerator of which is the outstanding principal balance of such
Lender's Loans and the denominator of which is the aggregate outstanding
principal balance of all Loans.

     "Real Property" means all of the right, title and interest of any Person in
and to land, improvements and fixtures, including leaseholds.

     "Reduction Amount" shall have the meaning set forth in Section 2.06(c) of
the Agreement.

     "Reduction Date" means any Initial Loan Reduction Date or Additional Loan
Reduction Date.

     "Register" shall have the meaning provided in Section 2.10(a) of the
Agreement.

     "Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor to all or a
portion thereof establishing reserve requirements.

     "Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing or
migration into the environment.

     "Reportable Event" means an event described in Section 4043(c) of ERISA
with respect to a Plan that is subject to Title IV of ERISA other than those
events as to which the 30-day


                                       18



notice period is waived under subsection .22, .23, .25, .27, or .28 of Section
4043 of the Pension Benefit Guaranty Corporation Regulations.

     "Required Currency" shall have the meaning provided in Section 11.22 of the
Agreement.

     "Restricted Payment" shall have the meaning provided in Section 7.07 of the
Agreement.

     "Requisite Lenders" means any combination of Lenders whose combined
Proportionate Share (and voting interest with respect thereto) of all amounts
outstanding under the Credit Agreement is greater than 50% of all such amounts
outstanding.

     "Reserve Percentage" means with respect to Adjusted LIBOR and an Interest
Period, the maximum reserve percentage (expressed as a decimal, rounded upward
to the nearest 1/100th of one percent (0.01%)) in effect on the date LIBOR for
such Interest Period is determined (whether or not applicable to any Lender)
under regulations issued from time to time by the Federal Reserve Board for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to Eurocurrency
funding having a term comparable to such Interest Period.

     "Responsible Officer" means, with respect to a Credit Party, the Chief
Financial Officer, the Chief Executive Officer (or any person having a similar
capacity), any senior vice-president, director of treasury and finance and any
other officer designated by the Chief Financial Officer of such Credit Party
acceptable to the Agent.

     "Restatement Date" means February 1, 2005.

     "Returns" shall have the meaning provided in Section 4.09 of the Agreement.

     "SEC" means the Securities and Exchange Commission or any successor
thereto.

     "Security Documents" means all contracts, instruments and other documents
now or hereafter executed and delivered in connection with the Credit Agreement,
pursuant to which liens and security interests are granted to the Agent for the
benefit of the Lenders, including without limitation, each Mortgage, each
Assignment of Earnings and Insurances, each Assignment of Charter and each
Pledge Agreement.

     "Share Capital" means:

          (A)  in the case of a corporation or a company, any and all shares,
               interest, participations, or other equivalent (however designated
               and whether or not voting) of share capital or corporate stock;

          (B)  in the case of an association or business entity, any and all
               shares, interests, participations, rights or other equivalents
               (however designated) of share capital or corporate stock;


                                       19



          (C)  in the case of a partnership or limited liability company,
               partnership or membership interests (whether general or limited);
               and

          (D)  any other interest or participation that confers on a Person the
               right to receive a share of the profits and losses of, or
               distributions of assets of, the issuer of such share capital.

     "Solvent" means, as to any Person at any time, that (a) the fair value of
the property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code; (b) the present fair saleable value of the
property of such Person in an orderly liquidation of such Person is not less
than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured; (c) such Person is able
to realize upon its property and pay its debts and other liabilities (including
disputed, contingent and unliquidated liabilities) as they mature in the normal
course of business; (d) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability to pay as
such debts and liabilities mature; and (e) such Person is not engaged in a
business or a transaction and is not about to engage in a business or a
transaction, for which such Person's property would constitute unreasonably
small capital.

     "Subsidiary" means any corporation, partnership, limited liability company
or other entity, the majority of the voting interests (including interests
arising out of securities or other interests convertible, at the option of the
holder, into interests of voting stock) of which is owned by a Person either
directly or through Subsidiaries.

     "Taino" or "Taino Maiden" means the Vessel described on Schedule I to the
First Priority Naval Fleet Mortgage, made on the 18th day of February 2005,
granted by Oldcastle in favor of the Agent.

     "Tayrona" or "Tayrona Princess" means the Vessel described on Schedule I to
the First Priority Naval Fleet Mortgage, made on the 29th day of June 2004 and
dated the 30th day of June 2004, granted by Arden, Henley and Vernon in favor of
the Agent.

     "Tax Sharing Agreements" means all tax sharing, tax allocation and other
similar agreements entered into by the Borrower and/or any of its Subsidiaries.

     "Taxes" means any and all present or future taxes, levies, imposts, duties,
deductions, withholdings, fees, assessments or other charges of whatever nature,
together with any and all assessments, penalties, fines, additions thereto and
interest thereon, in each case, now or hereafter imposed by any governmental
jurisdiction or other taxing authority.

     "Technotrade" means Technotrade Limited, a company organized under the laws
of Gibraltar, together with its successors and assigns.

     "Total Funded Debt" means, with respect to the Borrower for any period, the
average of the Borrower's Consolidated Funded Debt for each of the Borrower's
most recently ended four fiscal quarters, as reported in the financial
statements most recently delivered to the Agent.


                                       20



     "Total Funded Debt Ratio" means as of any date of determination the ratio
of (x) the Total Funded Debt to (y) the EBITDA.

     "Total Loss" means, with respect to a Vessel, any of (a) an actual or
constructive or compromised or arranged total loss of such Vessel (including,
without limitation, an insurance settlement on the basis of a total loss, or a
constructive or compromised total loss), (b) a Compulsory Acquisition of such
Vessel, (c) a requisition for hire of such Vessel for a period in excess of the
earlier of (x) 180 consecutive days and (y) the remaining number of days until
the Maturity Date, (d) destruction or damage to such Vessel beyond economic
repair or which renders such Vessel permanently unfit for normal use, (e) the
theft or disappearance of such Vessel for a period not greater than the earlier
of (x) 60 consecutive days or (y) the remaining number of days until the
Maturity Date, or (f) any other event that gives rise to the related charterer's
obligation to pay the loss value in respect of such Vessel.

     "Total Loss Proceeds" means all compensation, damages and other payments
(including insurance proceeds other than certain liability insurance proceeds)
received by the Agent, on behalf of the Lenders, from any Person, including any
governmental authority, with respect to or in connection with a Total Loss.

     "Transaction Document" when used in the singular and "Transaction
Documents" when used in the plural means any and all of the Agreement, the
Notes, the Assignment of Charter, the Assignments of Earnings and Insurances,
the Hedging Agreements (if any), the Mortgages, Security Documents, and the
Pledge Agreement and each other document or instrument delivered in connection
therewith or pursuant thereto, as the same may from time to time be amended,
restated, supplemented, renewed or otherwise modified.

     "Tuckahoe" or "Tuckahoe Maiden" means the Vessel described on Schedule I to
the First Priority Naval Fleet Mortgage, made on the 29th day of June 2004 and
dated the 30th day of June 2004, granted by Arden, Henley and Vernon in favor of
the Agent.

     "UCC" means the Uniform Commercial Code as from time to time in effect the
State of New York, or if the Uniform Commercial Code in any other State of the
United States is mandatorily applicable with respect to any particular matter,
the Uniform Commercial Code as from time to time in effect in such other State
of the United States.

     "Unfunded Current Liability" of any Plan means the amount, if any, by which
the value of the accumulated plan benefits under the Plan determined on a plan
termination basis in accordance with actuarial assumptions at such time
consistent with those prescribed by the PBGC for purposes of Section 4044 of
ERISA, exceeds the fair market value of all plan assets allocable to such
liabilities under Title IV of ERISA (excluding any accrued but unpaid
contributions).

     "United States" and "US" shall each mean the United States of America.

     "Vessel" has the meaning set forth in the respective Mortgage.

     "Vessel Cost" means (1) with respect to the Taino Maiden, the Tayrona
Princess and the Mohegan Princess, the appraised value therefor as set forth in
an appraisal acceptable in form


                                       21



and substance to the Agent plus any related acquisition costs agreed upon
between the Lender and the Borrowers and (2) with respect to the Tuckahoe, the
lesser of (x) the purchase price paid by Henley (as set forth in the bill of
sale or other evidence acceptable to the Agent) plus any related acquisition
costs agreed upon between the Lender and the Borrowers and (y) the appraised
value therefor as set forth in an appraisal acceptable in form and substance to
the Agent plus any related acquisition costs agreed upon between the Lender and
the Borrowers.

     "Viking" means Viking International Carriers, Inc., a company organized
under the laws of the Philippines, together with its successors and assigns.

     "Westbrook" means Westbrook Holdings Ltd., a company organized under the
laws of the Marshall Islands.

     "Wholly-Owned Subsidiary" means, as to any Person, (i) any corporation,
100% of whose capital stock (other than directors' qualifying shares) is at the
time owned by such Person and/or one or more Wholly-Owned Subsidiaries of such
Person and (ii) any limited liability company, partnership, association, joint
venture or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.


                                       22